Skip to main content

Full text of "The problem of high taxes in San Francisco .."

See other formats





Being a Discussion of Some of the Avoidable Causes 

of Waste and Inefficiency in Transacting 

the City's Business 

JUNE, 1915 




San Francisco Public Library 


Not to be taken from the Library 





Foreword * 

I. The Problem 7 

II. The Solution 1 1 

III. Mayor, Supervisors and Administrative Boards 14 

IV. Municipal Revenues 17 

V. Assessment Methods 27 

VI. Budget 32 

(a) Analysis of Budget of 1913-14 41 

VII. Accounting 67 

VIII. Purchasing 68 

IX. Civil Service 75 

X. Departmental Surveys 92 

(a) Police Department 96 

(b) Health Department 104 

(c) Sheriff's Office 113 

XI. Closing Summary 120 


The Recorder PrlntiDg and Publishing Company 





/a/d/cates aotnor/ty 



3//OW/NG 77/E 




The accompanying report is the result of an examination into 
municipal affairs in San Francisco with a view to discovering some 
of the causes of the rapid increase in governmental expense; that 
is, some of the avoidable causes not related to growth in popula- 
tion and the addition of new functions. 

It is in no sense a technical work. The sole object has been to 
point out, for the information of taxpayers and the public gener- 
ally, how, where, and why there is waste and inefficiency; in other 
words, by observation and analysis to diagnose the case. More 
advanced specialists in the science of government can undertake 
the cure. 

The Need of Such a Work. 

Any cKzen who goes to the trouble of comparing his tax bills 
of the past half-dozen years will be impressed with the importance 
of finding out how his money is spent. 

Aside from a few generalizations, emanating usually from 
sources too friendly or too hostile toward incumbent officials, and 
for that reason not convincing, there has been nothing to indicate 
the comparative efficiency of the several departments or of the 
city government as a whole. The existing system of reporting, as 
in the Municipal Reports, is worthless in this respect. 

Nevertheless, if the "municipal problem" is to be solved in San 
Francisco, taxpayers must know the facts and, further, must act 
upon them. This truth is recognized by the present Finance Com- 
mittee of the Board of Supervisors, which has written into its 
budget report for the coming year the following significant state- 

Rigid economy and a higher standard of efficiency must 
be enforced, else San Francisco's tax rate, which is now 
lower than in cities of comparable size, will rise to a disas- 
trous figure. 

The Plan of This Association. 

With a view to supplying the necessary facts as a basis for 
public discussion and constructive criticism, the inquiry reported 
on herein was begun more than a year ago by the California State 
Tax Association. 

This Association was organized in 19 13 as an independent, non- 
partisan, non-political body to promote the interests of tax reform 
in California. Since organization it has formulated and consist- 
ently urged a program for the improvement of general revenue 
and assessment laws, a summary of which is contained in a printed 
pamphlet entitled, "The Problem of Taxation in California," which 
has been widely circulated. 

It is well known, however, that effective tax reform consists 
not only in the correction of evils attending the levy and collection 
of taxes, but also in the improvement of conditions surrounding 
the EXPENDITURE of public money; i. e., in securing economy 
and efficiency. 

In order to demonstrate this second object of the Association, 
it was desired to make such a study of purely typical conditions 
as would, when published, awaken a desire on the part of the 
taxpayers for more efficient, less wasteful, methods of transact- 
ing public business. It was recognized that on the administrative 
side all counties and cities are very much alike, with problems 
of organization, management and accounting that differ only as 
to size. The effort was to prepare a report on conditions com- 
mon to all that would serve as a guide for the lesser counties and 
cities in making similar studies. San Francisco was chosen for 
the reason that its organization as a combined city and county 
presents all of the problems of local government to be found in 
the State. 

The Point of View. 

In approaching the task, the Association chose for its platform 
the active renunciation of two common beliefs: 

FIRST, that government must necessarily be less hon- 
est and less competent than private business; and 

SECOND, that official integrity, purpose and ability 
alone are a guarantee of efficient management. 

The first reflects the atmosphere of practical politics; the sec- 
ond is the fallen idol of many a "reform" campaign. Between the 
cynicism of the one viewpoint and the stupidity of the other, 
municipal government has become a paramount problem in Ameri- 
can life. 

The alternative, as adopted by this Association, is to look upon 
a city simply as a business enterprise, fairly comparable in the size 
and scope of its activities with the largest private corporations, 
which is maintained for the purpose of supplying certain measur- 
able services to the community at cost. 

Most of the functions of a city can be and, in fact, have been 
performed by private companies earning a profit. Nearly every 
undertaking, from conducting hospitals and schools to sweeping 
and repairing streets, has at one time or another in the past been 
under private management. 

The transfer to public management involves no change in busi- 
ness method or in the organization and direction of the work. It 
is not unfair, therefore, to apply to public business the same tests 
of efficiency that are constantly applied to private business. There 
is no cause for difference in the methods employed or in their 
effectiveness, and there is an equally strong requirement of special 
skill and training on the part of employes. 

This view has been sustained throughout the work. 

Summary of the Report. 

The accompanying report begins with a plain statement of the 
"Problem," which comprehends briefly the whole subject of grow- 
ing municipal expense and its meaning to the average taxpayer, 
followed by a brief discussion of the "Solution," in which attention 
is called to the singular fact that San Francisco alone of all large 
American cities, has not joined in the municipal research movement 
toward better government. 

Under the chapter headings of "Municipal Revenues" and 
"Assessment Methods" the statements summarized in the opening 
chapter are amplified and discussed, showing the relative tax 
burden in San Francisco and cities of comparable size, and the 
trend of local revenues during recent years. 

The city's plan of spending is considered next, under the 
heading of "Budget." Here an effort has been made not only to 
call attention to the inexact and unscientific methods used in 
planning the expenditure of $15,000,000 annually, but through an 
analysis of a particular budget (of the fiscal year 1913-14) it is 
shown concretely how these methods are productive of waste and 

But a defective plan is not the only cause. An efficient govern- 
ment must contrive to get value received for every dollar spent, 
whether for materials and supplies, or for personal services. In 
a chapter on Purchasing, the faults of the present methods of 
buying, receiving and accounting for goods are enumerated. The 
chapter on Civil Service discloses how there is a waste of the 
public's money under present conditions, for lack of better methods 
of employing, paying and discharging the city's employes. 

Finally, much of the waste and inefficiency found in public 

business is directly attributable to poor organization. Under the 
heading of "Departmental Surveys" the importance of subjecting 
each department and office of the city government to an intensive 
study for the purpose of discovering defects in organization is 
discussed, followed by three examples of such surveys wherein the 
need of such work is graphically shown. 

In conclusion, the report undertakes to summarize briefly the 
more important steps necessary to be taken to eliminate the waste 
and inefficiency that has grown up in the city government. 

Throughout the report, all possible emphasis has been placed 
upon methods and results, and none upon personalities and politics. 
No criticism lies against any official. All reference to natural mis- 
takes and errors in judgment has been carefully avoided as being 
irrelevant in this discussion. Only those methods and practices 
subject to correction have been considered. 

Delay in Publication. 

The inquiry was begun more than a year ago and was com- 
pleted last December. At that time, owing to the approaching 
charter and water bond elections, it was decided to postpone pub- 
lication until these events should be past. No change has occurred 
meanwhile to lessen the force of the conclusions and recommenda- 
tions contained herein. 

DUDLEY CATES, Secretary, 



San Francisco's expenditures have increased 165 per cent in 
fifteen years, with an increase of but 46 per cent in the popula- 
tion. (Note 1.) 

These figures have to do only with the current expenses of 
the municipal government. They include interest and sinking 
fund charges on bonds, but do not include about $40,000,000 
spent from bond issues since 1900. (Note 2.) 

This tells the story of the past. 

For the future, instead of reduced operating expenses, con- 
siderably more money will be required. 

Every new activity and many proposed improvements mean 
increased fixed charges for maintenance. For example, a few 
of the undertakings which cannot be much longer delayed or 
have already been commenced, which will require large sums 
for operation, are, 

(a) the Civic Center; 

(b) the new San Francisco Hospital; 

(c) additional parks and playgrounds; 

(d) additional schools; 

(e) the new boulevard system; 

(f) garbage and rubbish removal by the city instead of by 
private contractors; 

(g) garbage incineration; 
(h) city planning; 

(i) public comfort stations; 

(j) increased health and sanitary inspection; 

(k) more paved streets, better street lighting, etc., etc. 

The foregoing enumeration not being intended as a com* 
plete list. 

These are needs that must be met. They are the peremp* 
tory demands of the new era, San Francisco's broader civic life. 
Citizens should not ignore them; officials dare not. 

A Question of Revenue. 

The city's principal source of revenue is the direct taxation 
of property. 

In the fifteen years since 1900 the tax levy for municipal 
purposes has increased 164 per cent. (Chart II.) 

Elsewhere in this report will be found a fuller study of 
revenues, wherein three significant facts are revealed: 

Note 1. — This assumes a population of 500,000; the U. S. Census Reports 
for 1914 give 448,200. 

Note 2. — The increased debt of the city is responsible for a considerable 
share of the growing- expense. Eliminating- the amounts paid for interest 
and redemption of bonds, the budget expenditures have increased 114 per 
cent in the 15-year period. 


TAX LEVIES l<)«° - '<?«/- 

m 'f «/ 'f> 'f* -?»v 't" '1'* 't°7 'f" '1*J ' ">'" f9" 'J** 'I'- 3 '*'"~ '* P> 


» » m ciiy only 

» » •» DEBT 


/*■,++ f./tO 

'■9'f-77 J 

First, that the effort to tax personal property has broken 
down almost entirely; 

Second, that miscellaneous revenues from sources other than 
taxation are falling off rather than increasing; and 

Third, that all of the increased costs of government are 
borne by the tax on real estate. 

It is possible to build up in some degree the indirect sources 
of revenue, following the practice of other cities, but these 
nevertheless will grow proportionately smaller year by year. 
Taxation must supply the funds, and if some means is not devised 
to check the steady diminution in the personalty tax and make 
this form of property pay a larger share of the expense of 
government, it will remain for real estate to bear the whole 

In Comparison With Other Cities. 

It has been the practice of the Assessor of the City and 
County of San Francisco to publish comparative tables showing 
that San Francisco escapes with a light tax burden. 

The manner of reaching this conclusion is discussed elsewhere 
in this report. Here there is presented a genuine comparison, 
based on the actual per capita tax levies of the largest American 

Only three large cities in the United States — Boston, New 
York and Pittsburgh — pay more taxes in proportion to their 
population than does San Francisco. (Note i.) 

In the six cities comparable in size with San Francisco, 
namely, Cleveland, Baltimore, Pittsburgh, Detroit, Buffalo and 
Milwaukee, the average per capita tax was $19.47 in 1912. The 
per capita tax in San Francisco the same year was $24.14, or 
24 per cent higher than the average for other American cities 
with population between 400,000 and 600,000.* 

The rate of increase has been higher in San Francisco also 
in recent years than in any other large city, with the single 
exception of Detroit. Comparing the tax levies of the thirteen 
largest cities in 1908 with the levies in 1912, the average rate 
of increase is 33 per cent. During that period, the tax levy in 
San Francisco increased 53 per cent.f 

How Much Can Real Estate Stand? 

Unless conditions of extraordinary prosperity obtain con- 
tinuously, higher taxation presently must become a dead line 
for the city's future growth. 

Note 1.— Bureau of the Census: Financial Statistics of Cities, 1912. 

Per capita tax levies: 

Boston $31.31 

New York 30.72 

Pittsburgh 26.69 


Buffalo 21.45 

Cincinnati 19.57 

Other per capita levies all below Cincinnati. 


tBureau of the Census: Financial Statistics of Cities. 1907 and 1912. 


This is a demonstrable fact. An equitable tax appropriates 
only income, not capital, and a tax on real estate must be paid 
from rents or from the normal increase in land values. Rents 
cannot be raised beyond what the trade, business and salaries 
of the community will bear, and when these are not sufficient to 
pay taxes and yield in addition a proper return to the investor, 
depression sets in and development is checked. 

Whether this point has been reached already in San Fran- 
cisco is open to question, but there is no question that it will 
be reached soon, if the present rate of increase is maintained. 
Rents are much higher than in competitive cities, and there is a 
general belief that no change toward increased rental is possible 
until, by increase in business and population, a normal and legiti- 
mate rise in real estate values is brought about. 

For the small property-holder, that large body of citizens 
owning their own homes, there is much discouragement. In- 
creased assessment values with increased taxes mean increased 
living expenses. The desire to own a home is lessened and the 
social menace of a proletarian population grows apace. 

For the large property-holder, who buys and builds for invest- 
ment, high taxes act as a strong deterrent. The capital of 
this body of citizens tends to seek other fields and the com- 
munity suffers. 

This is the problem of San Francisco: to carry on its neces- 
sary public work without sacrifice of the future. 




There can be no doubt that beyond a given point taxation 
reacts most powerfully upon a community, affecting adversely 
the social and economic life of the people. 

In San Francisco, with the necessity at hand for making 
additional expenditures, and with revenues from taxation already 
close to the limit imposed by economic law, but one resort 
remains, namely: 

By more efficient management to cut the costs of operation 
sufficiently to SAVE funds for the additional requirements. 

Herein is the implied charge that San Francisco's manage- 
ment is unnecessarily expensive; that there is a waste of public 
money; that savings can be made without a sacrifice of effi- 
ciency. Is the statement supported by facts? 

A Word of Explanation. 

The public and public officials generally are weary of the 
municipal reformer with his reckless accusations and his untried 

So, too, with the "special investigator," who follows the 
trail of a penny graft and ignores the leakage of dollars gone to 

It may be taken that graft is not costing the tax-payers of 
San Francisco five cents a year. It may be assumed that no 
official is wantonly wasting the public's time or money. Neither 
the integrity nor the purpose of officials is challenged in the 
least when the charge is made, and repeated, that San Fran- 
cisco's management is unnecessarily expensive. This should be 
understood in order to appreciate the motive of the California 
State Tax Association in undertaking this work. 

Facts, Facts, Facts. 

The whole work of the Association, as reported on herein, 
has been a quest for FACTS — facts that would show how, where 
and why there is waste and inefficiency in the city government. 

With the resources available to the enquirers, a compre- 
hensive, analytical survey of the 56 elective offices and 10 or 
more departments was not possible, but a sufficient study was 
made to indicate the purposes of the work and to justify the 
statement that there is urgent need for carrying it into every 
branch of the city's activities. 

The only standards set up were those that have been tested 
in practice in other cities, especially in those cities where the 
municipal research movement has borne such excellent fruit in 
the past eight years. On the administrative side, all large cities 
are very much alike. Their functions are identical, and methods 


that are successful in New York, Chicago, Philadelphia or St. 
Louis are applicable in San Francisco, whether they relate to 
street construction, budget-making, accounting, purchasing or 
any other purely administrative or operating function of the 
public corporation. 

Local pride cannot overcome the fact that nearly all large 
American cities are ahead of San Francisco in the systematic 
study and adoption of modern administrative methods. In addi- 
tion to the four cities named above, Cleveland, Baltimore, Pitts- 
burgh, Boston, Milwaukee, Cincinnati and a score of others 
maintain active efficiency or municipal research bureaus, either 
as a part of the official government or as a private agency sup- 
ported by citizens, to examine the structure, analyze the func- 
tions and duties of departments and individual employes and 
put into effect the best thought and experience available on the 

High taxes forced upon these cities the intensive study of 
their expenditures. 

High taxes compel San Francisco to the same course. 

A Summary of Conditions. 

Some of the practices and conditions which make government 
unnecessarily expensive in San Francisco are noted below. Else- 
where in this report they are discussed in more detail. They are: 

i. Paying more than the market rate indicates a service is 

2. Failure to prepare specifications for purchases in such a 
way as to eliminate favoritism and to obtain the best terms. 

3. Absence of central control over expenditures. 

4. Lack of discipline among employes. 

5. Inexact, unscientific methods of budget-making, which 
operate to create large surpluses as a temptation to extravagance. 

6. Delay in the audit and payment of claims. 

7. Duplication of effort, or lack of co-ordination, as in the 
city's accounting system. 

8. Failure to keep in all departments and institutions records 
of supplies, stores and equipment, although it is as important to 
maintain strict stewardship over goods as over money. 

9. Failure to keep comparable records of the cost of feeding 
prisoners at the jails, inmates at the relief home, etc.; of the 
unit cost of street construction and repair; of repairs to city 
automobiles, etc., etc. 

10. Failure to maintain individual efficiency records of the 
more than 3,000 city employes. 

11. Absence of any attempt to standardize salaries. 

12. A general belief that the city is rich and can afford to 
be open-handed; that a time-clock in the corridor would be an 
insult to employes; that the old rule o' thumb is good enough; 
in general, the belief that public business cannot be as compe- 
tent or as efficient as private business. 


A Summary of Reasons. 

There are reasons apart from official negligence and bad faith 
for these conditions. Some of them are given below: 

i. Needless and cumbersome charter restrictions. 

2. Faulty organization, causing indefinite responsibility and 
lack of co-ordination. 

3. Patronage — the granting of private favors at public ex- 
pense, a practice still condoned in the atmosphere of "practical 

4. Lack of competent direction. 

5. A wrong conception of the purposes of "Civil Service." 

6. Tests of individual and departmental efficiency not gen- 
erally available, because of absence of proper accounts and 

7. Ignorance. 

8. Lack of public interest in the city's business. 
What is to be Done? 

From the FACTS collected in the inquiry made by this Asso- 
ciation, it can be shown that there is a leakage of public funds. 

From the experience of other cities, it is known that this 
leakage can be stopped. 

The accompanying report is a. first step in a program of 
municipal betterment in San Francisco. 




In order to comprehend the workings of the San Francisco 
municipal government it is necessary first to understand the 
informal relationship existing between the Mayor, the Board of 
Supervisors and the Administrative Boards and Commissions, 
such as the Board of Public Works, the Board of Health, etc. — 
a relationship which is largely independent of the organization 
plan outlined in the Charter. 

The plain intent of the Charter was to separate the legislative 
and administrative functions of the city government. To this 
end, all legislative power was vested in the Board of Supervis- 
ors, which is a political body elected by the people, and all 
administrative authority was given into the hands of non- 
political boards and commissions appointed by the Mayor for 
fixed terms and answerable to him as the Chief Executive. 

This balance has not been maintained, with the result that 
the original plan has been turned all awry. To a large extent, 
the Board of Supervisors through its committees has usurped 
the powers and duties of the appointed Boards. Through its 
control of funds it has been able to reduce some of these to the 
position of mere figure-heads. Some of the Boards have stub- 
bornly resisted the encroachments of the Supervisors, and con- 
flicts are of monthly occurrence. Others have effected informal 
compromises. The result is that nearly every one of the eleven 
Boards and Commissions stands today in a different relation- 
ship to the Supervisors. 

While it may be granted that in many cases the action of the 
Board of Supervisors in seeking additional powers was for the 
public good; that is, that it was caused by the desire to control 
inefficient boards, the changed situation presents new evils which 
in time may be worse than the old. 

First, there is the lack of harmony and co-operation which 
must inevitably grow out of such a situation. 

Second, when powers and duties are not clearly defined and 
enumerated, it is virtually impossible to place responsibility. 

Third, all authorities are agreed (as were the Freeholders 
who drafted the San Francisco Charter) that the gravest abuses 
must sooner or later attend the exercise by political bodies of 
administrative powers, for the reason that political considera- 
tions will come to influence their judgments. 

Resulting Conflicts. 

Many examples might be cited to show the extent of these 
conflicts. Through its Streets Committee, the Board of Super- 


visors usurps that part of the authority of the Board of Public 
Works wherein the latter is expressly given discretionary powers 
in ordering the repair and improvement of streets. The Charter 
(Article VI, Chapter II, Section 2) reads: 

"No street work or street improvement of any kind 
shall be ordered to be done by the Supervisors unless a 
written recommendation to do the same has been made 
to them by the Board of Public Works. . . ." 

This section is nullified by the practice of the Board of Super- 
visors of commanding the Board of Public Works to make spe- 
cific recommendations, of which the following, from the Journal 
of Proceedings of November 9, 1914, is an illustration: 

"On motion of Supervisor McCarthy: 
J. R. No. 1506. 

"Resolved, that the Board of Public Works is hereby 
directed to recommend the repaving of Powell street, 
between Sutter and Bush streets." 

The resolution was passed without a dissenting vote, as a part 
of the regular routine of the meeting. It was offered by Super- 
visor McCarthy in behalf of the Streets Committee, which, in 
conjunction with the Finance Committee, controls all expendi- 
tures for street work. 

The Buildings Committee of the Board of Supervisors, and 
not the Board of Public Works, controls and directs the repair 
and maintenance of public buildings. The Lighting and Rates 
Committee regulates all street lighting. The Health, Police and 
Fire Committees exercise a variable measure of administrative 
control over these departments, and the Finance Committee is 
almost constantly in conflict with one or another of the Boards, 
or with several at a time, over the propriety of expenditures, 
often endeavoring to assert an authority it does not possess; 
sometimes conferring privileges it has no right to confer. 

Divided Authority. 

Divided authority means divided responsibility, which is highly 
undesirable from the standpoint of public policy. A peculiarly 
significant manifestation of the current tendency towards divided 
responsibility was the recent shifting from the Board of Police 
Commissioners to the Board of Supervisors of the question of 
permitting dancing in cafes. In this case, the Supervisors were 
asked to approve a "Journal Resolution" (not an ordinance) 
declaring it to be "the sense of the Board" that the citizens of 
San Francisco should not be restrained from enjoyment of danc- 
ing. Utterly apart from the question itself, the point made here 
is that the Board of Supervisors has nothing to do with it, and 
was setting a dangerous precedent when it consented in this 
informal manner to share the responsibility with the Police Com- 
mission. The Charter expressly fixes this responsibility with 
the Commissioners, who are subject to removal by the Mayor 


if their notions concerning the enforcement of the law conflict 
with those of the public. 

This brief statement of the relationship of the Mayor, the 
Supervisors and the Administrative Boards is included here 
chiefly for the purpose of facilitating an understanding of the 
municipal government, but partly, too, as a suggestion for 
needed charter reform. These faults are fundamental, for they 
underlie the whole scheme of organization. As long as they 
persist, a really efficient organization and a really efficient admin- 
istration of public business will not be possible of attainment. 


5CC//RCF6 of- ja/co/ve: 


Jo, 000 

X?£AZ- £:& 

~T~A X EZ. s 

yo.zr y 





The revenue sources of the City and County are shown in 
the accompanying chart, as estimated for the fiscal year 1914-15. 
(Chart III.) 

The bulk of the city's income is from the general property 
tax, and the greater portion of this, in turn, is paid by real 

Miscellaneous revenues, whose relative importance is indicated 
by the order in which they are set down, are (1) liquor licenses; 
(2) state apportionment to schools; (3) county fees; (4) general 
license taxes; (5) refund from the state on account of bonded 
indebtedness; (6) rents; (7) state aid for minors; (8) franchise 
percentages; (9) interest on public moneys; (10) fines, etc., etc. 

The Trend of Taxes. 

A study of revenues is included here for the purpose of show- 
ing the changes that have taken place in the revenue scheme 
within the period contemplated by this report (the past 15 years) 
and more particularly since the beginning of the new era of 
growth following the fire of 1906. 

These facts demand the attention of every tax-payer. 

Consider first the 15-year period beginning with the fiscal 
year 1900-01, immediately after the present charter went into 

Then as now the city was supported by the general property 
tax, plus receipts from the state for the maintenance of schools, 
and county fees, fines, rents, interest and the returns from license 

In making the budget of that year, it was provided that the 
revenue should be raised as follows: 


Tax on real estate $2,982,600. or 53.0% 

Tax on personal property 1,254,900. or 22.3% 

Miscellaneous other sources 1,388,700. or 24.7% 

Total $5,626,200. 100. % 

Compare this distribution of the revenue burden with the 
budget of the fiscal year 1914-15: 


Tax on real estate $10,544,535. or 70.7% 

Tax on personal property 1,610,500. or 10.8% 

Miscellaneous other sources 2,761,430. or 18.5% 

Total $14,916,465. 100. % 

This comparison is presented to show how revenue conditions 
have altered since the adoption of the present charter. The 


chief point here is the gradual break-down of the personal prop- 
erty tax, which is shown graphically in the accompanying chart. 
(Chart IV.) 

In the fiscal year 1900-01, when local property paid state 
taxes also (the "separation" plan under Constitutional amend- 
ment No. 1 did not become effective until 191 1), personal prop- 
erty paid 28.5 per cent of the total tax levy. In the last fiscal 
year (1913-14) personal property paid but 12.3 per cent. Chart 
IV. shows how the two branches of the general property tax 
have operated in San Francisco during the last fifteen years. 

Discounting all fluctuations in the assessed value of taxable 
property in this period, the net change in fifteen years is as 


1900. 1914. Per Cent Inc. 

Real estate $288,530,645. $519,830,262. 80.16 

Personal property 121,624,659. 127,274,272. 4.64 

The Past Eight Years. 

Consider now the revenue changes that have occurred in the 
briefer period beginning with the fiscal year 1907-08, the figures 
for which afford a better basis for comparison, for the follow- 
ing reasons: 

1. The fiscal year 1907-08 was the first year of the emer- 
gency tax levy in excess of the "dollar limit." 

2. Saloon licenses had lately been raised, increasing the rev- 
enues from sources other than taxation by more than $500,000 
a year. 

3. This period marks the beginning of San Francisco's new 
growth as a city. 

The expense budget for the year 1907-08 was as follows: 

General fund $6,256,550. 

Bond Interest, etc 594,700. 

School fund 1,403,100. 

Library fund 61,500. 

Park fund 287,000. 

Firemen's Pension fund 34,850. 

Total $8,636,700 

The expense budget for the fiscal year 1914-15, as adopted by 
the Board of Supervisors June 9, 1914, is as follows: 

General fund $9,444,292.16 

Bond Interest, etc 2,919,773. 

School fund 1,980,200. 

Library fund 97,000. 

Park fund 375,200. 

Firemen's Pension fund 100,000. 

Total $14,916,465.16 

•Both operative and non-operative property included in the figures for 




to /q*, iqex /<r»3 'f>~ /?<W 'Qet '9^7 '?»* 'r*r /*" f 1~ M, 

n. fffi 'f 























2,ooa ceo 



... "' 





ou /<fc, fo*- ")'* f* 'ff '9o* 't°7 'fT 'fa? 'fo y/r '?/*. /Jpa> 'f 




In the following discussion, only the general fund is consid- 
ered, for the reasons, (i) it is the fund from which current ex- 
penses of government are paid, and into which come miscel- 
laneous departmental revenues; (2) it alone furnishes a fair basis 
for comparison. 

The general fund for each year since July 1, 1907, and the 
revenues upon which each budget was made, are shown in the 
following table: 



General fund R.E. Taxes 
6,256,550. 3,110,050. 





P.P. Taxes 






1 ,000,000. 














Percentages of increase in eight years: 

General fund budget 50.95% 

Real estate taxes 11 1.98% 

Personal property taxes 2.93% 

Revenue from other sources 14.87% decrease. 

A graphic illustration of the revenues in this period is given 
in Chart V. Practically, miscellaneous revenues and receipts 
from the personal property tax in the general fund have not 
increased in eight years, while real estate has contributed in 
growing proportion. 


9,000, 000 





7,000. 000 

%, 000. 000 





4. 000, 000 










2, 000, 000 

/ 00O£00-~ 

. „ . 

"" *~ 

/. 000. 000 

/(jof-ofr /Oaf 

Of /fof-/o /o/O'/t /fff-/2, /Q/Z-/3 "?'3-'+ 'f'+-'S 



st/iC£UAMeou4 /?evea/uez> 

PEKIOa/au s>/?OPE/?Ty taxes — • — 

The Remedy. 

In the report of former Assessor Washington Dodge to the 
Mayor, dated August 4, 1911, the following recommendation is 

"Let the endeavor be made to raise a larger part of 
our City's revenue from sources other than direct taxa- 
tion. Many of our American cities are readily collect- 
ing in this way a much higher percentage of their total 
revenue than is San Francisco. Such a course would 
serve to relieve all tax-payers of a part of their bur- 

Little in the way of a practical effort to act upon Dr. Dodge's 
recommendation has been attempted. Occasionally one or an- 
other of the Supervisors offers an ordinance proposing new 
license taxes or changing old ones, but a comprehensive survey 
of the whole revenue problem is still to be made. 

Every real estate owner in San Francisco should insist upon 
such an investigation without delay. 

For each $54,000 that can be raised in other ways, one cent 
is saved on the tax rate. 

San Francisco's tax rate has reached a point where every 
cent counts. 

New York's Experience. 

An example of what might be accomplished by a detailed 
analysis and study of the revenue problem is contained in 
the report of an advisory committee of citizens appointed for 
this purpose by the Mayor of New York.* 

This committee reported recommendations which, if carried 
out, it was estimated would add immediately $4,000,000 to the 
City's income, with an additional increment of more than 
$1,000,000 a year. 

Some of the questions raised by the New York report, an- 
swers to which in their bearing on San Francisco would be of 
immense value in building up "indirect" revenues, were: 

1. What additional business taxes or licenses might be im- 

2. Are the county fees too low? (or too high?) 

3. Has the city unused and unneeded real estate which 
should be sold? 

4. Can a better method be found for disposing of unused 
property belonging to the city? 

5. Can a higher rate of interest be secured on deposits 
through the separation of active checking accounts from inactive 

6. Should not all revenues from every source, some of which 
are now diverted to the several funds, be paid directly into the 
treasury to the credit of the general fund, the requirements of 
the special funds being met by direct budget appropriation? 

♦Report of the Commission on New Sources of City Revenue. City of 
New York, 1913. 

License Revision. 

One of the principal recommendations of the New York 
Commission was the conference of broader licensing powers 
upon the city, in order to make way for the extension of the 
license system. The report reads: 

"The City should be given the power to license all 
businesses of such a character as to require inspection 
and regulation and to fix the fee charged for such 
licenses. In its certification to the public that his 
business conduct conforms to a recognized minimum 
standard of reliability, and that the moment he is found 
wanting in the maintenance of this minimum standard, 
he immediately forfeits his right to do business, the 
license confers a distinct and an appreciable benefit upon 
the licensee — the mere fact that he is in business tes- 
tifies to his business integrity."* 

It is specifically recommended that the license system be 
extended to include those businesses engaged in the sale of 
foodstuffs, which, in San Francisco as in New York, are sub- 
ject to inspection and regulation by both the sealer of weights 
and measures and the inspection service of the Health Depart- 

The limitation contained in the San Francisco Charter (Note 
i) does not affect the exercise of the police power. In a case 
appealed from Los Angeles (Ex parte Montgomery, 125 Pac. 
1070) the Supreme Court held that nothing in a municipal char- 
ter could affect the constitutional grant made to a city, and 
that under that grant a city is entitled to exercise the whole 
police power of the state, so far as local regulations are con- 
cerned, subject only to the control of general laws. 

Even if the Charter were held to be a legal check upon the 
licensing of markets, garages, lumber yards, house cleaning 
agencies, cigar stores and other businesses, that document is 
subject to amendment. 

But without the grant of additional powers, the revenue from 
licenses can be materially augmented through the readjustment 
of rates on businesses already licensed. 

Comparison with Los Angeles. 

The city of Los Angeles, operating under the same general 
tax laws and with substantially the same powers, enjoys an 
income from business licenses (other than those on retail liquor 
houses) double the income derived from the same source in 
San Francisco. In 1913, Los Angeles collected $336,588 in busi- 

♦Ibid, page 60. 

Note 1. — Article II, Chapter II, Section 15, grants to the Supervisors the 
power "to impose license taxes and to provide for the collection thereof; 
but no license taxes shall be imposed upon any person who, at a fixed 
place of business in the city and county, sells or manufactures goods, wares 
or merchandise, except such as require permits from the Board of Police 
Commissioners, as provided in thiy charter." 

Elsewhere it is provided that liquor dealers, pawnbrokers, peddlers, 
junkshop keepers, dealers in second-hand merchandise, auctioneers and 
intelligence office keepers shall obtain such permits. 


ness taxes. San Francisco's collections amounted to $i77,438. x 
In the following table a comparison is made of some of the 
ordinance license rates in the two cities: 

Los Angeles San Francisco. 

Peddlers $60. $24. 

Taxicabs 30. $1.50 to $5. 

Junk dealers 60. 12. 

Pawn-brokers 200. 124. 

Wholesale liquor 1200. o 

Fortune tellers 360. o 

Undertakers 60. o 

Wholesale bakeries 60. o 

Laundries 60. 24. to 40. 

By the adoption of rates similar to those in force in Los 
Angeles, the revenue from business licenses (other than retail 
liquor licenses) could be practically doubled. 

It is worth remembering that: 

1. For each $54,000 collected thus, one cent is saved on the 
tax rate; 

2. Every cent on the tax rate is a charge of $47,500 upon 
real estate; 

3. Licenses at the Los Angeles rates would save the real 
estate owners of San Francisco $150,000 a year. 

In San Francisco there is no codification of license ordinances. 

Many of them were passed years ago, under different con- 

Many are not even printed, except on "proof-sheets." 

No one is charged with the responsibility of studying the 
question, as in St. Louis, where a Board of License Revision 
works continuously to build up this important source of revenue. 

Fines and Penalties. 

Los Angeles collects more than two and one-half times as 
much as San Francisco in fines and forfeited bail money. In 
1913 there was paid into the treasury of the City of Los Angeles 
$120,051 from this source, while San Francisco's receipts in the 
same period amounted to but $47,318. (In addition to the city 
receipts, Los Angeles County collected $74,822.) 3 

This condition was called to the attention of the Supervisors 
in a report of the late Bureau of Efficiency under date of June 7, 
1913, in which a readjustment of the extreme penalties imposed 
by San Francisco's ordinances was recommended. No action 
was taken on this splendid report on how revenues could be 
increased and how simultaneously the infamous "bail bond" 
business could be ended. 4 

Fees of County Offices. 

Fees from the county offices in San Francisco have declined 
steadily in total collections since 1908. The State Controller's 

'Annual Report of State Controller on Financial Transactions, Califor- 
nia Counties and Cities, 1913, page 52. 

2 Rates by the year. Others in proportion. 

'Ibid., page 22. 

♦Bureau of Efficiency: Report on Penalties in Municipal Ordinances. 


report for 1913 shows that the receipts of Los Angeles County 
in that year were $365,941; of San Francisco, $253,481. (Page 

A comprehensive study should be made of the fees charged, 
to find whether changes should be made. 

Interest on Public Money. 

Receipts from interest on public money deposited in banks 
have declined also in late years. In 1913 the City of Los 
Angeles collected $84,020 in interest on its deposits; San Fran- 
cisco collected $72,386.! 

In San Francisco the charter provides that the rate of 
interest shall be fixed annually by joint action of the Mayor, 
Auditor and Treasurer. 2 

The Charter provides also that the interest rate shall not 
be less than two per cent, and in practice it is never more. 
Other cities enjoy larger returns from their deposits by solicit- 
ing competitive bids from the banks. In many places the rate 
in three per cent and above in normal times. 

It should also be possible to increase this income through 
the separation of active and inactive accounts, as recommended 
by the New York Commission on New Sources of City Revenue. 
Charter amendment would be necessary before this could be done 
in San Francisco. 

Disposal of Unused Property. 

Sales of unused personal property, defined usually as "junk," 
bring into the treasury about $12,000 annually. 
Under the Charter 3 

the Board of Supervisors is given the power "to pro- 
vide for the sale at public auction, after advertising for 
five days, of personal property unfit or unnecessary for 
the use of the City and County." 

In practice, the proposal to sell such property originates in 
the department using it and not otherwise. Upon receiving a 
recommendation that property be sold, the Supervisors authorize 
the Mayor to proceed with the sale and the Mayor delegates 
the task, sometimes to the Supplies Committee of the Board 
and sometimes to a special appointee. Sales are made at fair 
prices under this system. 

The objection to it lies in the fact that there is no controlling 
inventory of the city's property to show to a central authority 
what goods and equipment are not needed. 

Other cities have found it profitable to establish a steward- 
ship over all city property, in the person of a central purchasing 
agent, who by virtue of his position can best determine the 
requirements of the departments and when to sell or transfer 

'Annual Report of State Controller, 1913, page 22. 
2 Artlcle IV, Chapter III, Section 2. 
'Article II, Chapter II, Section 33. 


unneeded property. He is also in a position to get the best 
results at sales. 

Such an authority is needed in the city government of San 
Francisco, not alone to supervise the economical use of equip- 
ment, but to maintain a strict accounting control over all of 
the city's personal property. 

At the present time, inventories are made by each depart- 
ment once a year and submitted to the Clerk of the Board of 
Supervisors, but they are not in comparable form from one 
year to another and no use is made of them. 

It is not possible to estimate the increased revenue that 
might be obtained through changing the method of selling 
unused property, but the experience of other cities leads to the 
belief that the opportunity should not be overlooked, especially 
inasmuch as no change in Charter or ordinance is required. 

Miscellaneous Fund Revenue. 

In addition to the amounts provided annually by tax levy 
or otherwise in the general city budget, certain funds collect 
and make use of revenues not included in the budget. The 
most important of these are the Park Fund, Library Fund, 
School Fund and Police Relief and Pension Fund, the last- 
named being composed entirely of miscellaneous receipts. 

There is no sound reason why the revenues of these branches 
of the city government should not be measured by their ex- 
pense, as in the case of the other departments. A proper budget 
would estimate in detail the expense of each of these depart- 
ments and provide for raising the exact amount and the payment 
of it through, or from, the general fund. The present system 
seems to be based on the theory that the departments are getting 
something for nothing, when, as in the case of the Park Fund, 
receipts from sales or the operation of the Beach Chalet give 
the Park Commission $50,000 in addition to the appropriation 
regularly provided in the budget. 

To secure effective control, to make the fullest use of these 
revenues and to guard against the temptation to extravagance, 
all revenues should be paid directly into the general fund and 
the departmental needs met by direct appropriation. 

This is not an implication that the money is misused or that 
it is not needed by the departments collecting it. It is a sug- 
gestion looking to more intelligent budget-making, along with 
conservation of the city's revenues. 

Other Revenues. 

The other existing sources of city revenue are not capable 
of material expansion. The apportionment of state school 
money is made on a fixed basis depending upon enrollment and 
attendance; state aid for minors is limited by rules established 
at Sacramento; franchise taxes depend upon the gross receipts 
of the street railway companies; and building permits, of course, 
depend upon the activity in the building trades. The sources 
capable of development are as recited in this chapter. 



The growing expense of government and the heavier burden 
imposed upon real estate by the declining personal property tax 
render more important than ever the problem of securing 
equitable assessments. 

Fundamentally, the assessment methods employed in San 
Francisco (as in the state at large) are wrong for the reason 
that property is not placed on the assessment roll at its "full 
cash value," as required by law. 1 

This view is held by taxation authorities without exception. 
One of the leading tax experts of the country writes on the 
subject: 2 

"An equitable assessment cannot be made except at 
full value, and unless the assessment is at full value the 
individual taxpayer has no real protection against over- 

One of the chief reasons urged in support of the Consti- 
tutional Amendment which, in 1910, separated state and local 
taxation in California was that 

"the assessor can value the property at its full cash 
value without . . . fearing either that his constitu- 
ents would have to pay too much state tax or that the 
State Board would discredit him by reducing his valu- 
ation. That this would be conducive to greater equality 
between individual taxpayers is obvious." 3 

The report of the first State Commission on Revenue and 
Taxation, published in 1906, discusses the advantages of assess- 
ing at full value as follows: 4 

"If there were no state tax . . . there would be 
more inducements to the Assessor to assess the property 
as nearly as possible at its full market value in order to 
avoid inequalities between the citizens among his own 
constituents, and to protect himself against the charge 
of favoritism. The probability is, that in order to enjoy 
the advertising effect of a low tax rate the general in- 
clination would be for the assessor to raise the valuation 
rather than reduce it. A high tax rate is a bad adver- 
tisement for a city or a county." 

Under-valuation is still practiced, however. According to the 
Assessor's reports, the basis of valuation is 50 per cent in the case 

'Section :?6ii7, Political Code. 

: Edward L. Heydecker, Assistant Tax Commissioner, New York City. 
3 Report of the California Commission on Revenue and Taxation, 1910, 
ge 31. 
4 Fagcs 62 and 63. 


of real estate and improvements, varying to some extent according 
to the earning capacity of the property.* 

Among the leading American cities, New York, Philadelphia, 
Boston, Cleveland, Baltimore, Pittsburgh, Milwaukee and Cin- 
cinnati have adopted the principle of assessments at full cash 
value, and in all but two of these cities it is being carried out in 
practice. The result is a lower tax rate as an inducement to 
investors, equality as between individual taxpayers of all classes 
and a beneficial stimulation of the public's interest in its own 

What Undervaluation Means. 

Undervaluation is the habitual cloak for tax abuses, real and 
potential. No study has been made in connection with this 
report of conditions prevailing in San Francisco, nor is a study 
of local conditions needed to point the dangers of the present 
system. The experience of other cites is sufficient proof. 

A typical example is found in a report of the District of 
Columbia Committee of the House of Representatives, which, 
in 1912, investigated the assessment and taxation of real estate 
in the district.f This committee reported that while the 
theoretical basis of assessment was 66 2/3 per cent, land was 
assessed at from 20 to 60 per cent of its true value, resulting 
in gross inequalities as between individuals and sections. 

As a result of its studies, the committee recommended first 
of all that "real estate should be assessed at its full value," 
adding the comment that "with true value as the basis of assess- 
ment, over-assessments and under-assessments are more appar- 
ent and therefore more easily corrected." Further, it was 
declared that a full value assessment is best for advertising pur- 
poses and that the adoption of this practice would do away 
with the work of computing percentages. 

Under-valuation means more than a high tax rate, the dis- 
couragement of investors and the possibility of gross injustices. 
It means that the injustices, if they exist, are concealed and there 
is no recourse for the victim. 

A taxpayer who considers his house and lot worth $10,000 
is not likely to protest an assessment of $7,000. If he went 
before the Board of Supervisors sitting as a Board of Equaliza- 
tion, he would be asked to tell under oath what he considered 
his property to be worth, which statement might then be legally 
used to increase, rather than equalize, his assessment. 

Appeals to the Board of Equalization are few, under-valuation 
creating in the mind of each taxpayer the impression that he is 
escaping part of his just share. If property were assessed at 
full value, there would be fewer tax dodgers and no over-assess- 

*It is true that practically every county and city assessor in California 
follows' the same practice of under-valuation in spite of the law. The 
Special Report of the State Board of Equalization on the Relative Burden 
of State and Local Taxes in 1912 (page 36) showed that the percentage of 
assessed to true value in that year ranged from 25 to 52 per cent. 

t62d Cong., 2d Session, House Report No. 1215. 

2 9 

The Assessor's Report. 

Reference has been made already to the Assessor's report, 
wherein figures are presented in an effort to show that San 
Francisco pays lower taxes, comparatively, than most cities. 

In order to arrive at this result, the Assessor assumes that a 
comparable basis can be reached by dividing by two the assessed 
valuations of cities that assess at full value, and multiplying 
by two their tax rates. The effect of this simple application of 
arithmetic is to show that San Francisco pays lower taxes than 
any large city in the country. 

The fallacy of this method of comparison should be evident, 
for the following reasons: 

1. It rests on the assumption that the basis of assessment 
in San Francisco is actually 50 per cent, which, if true, makes 
the true per capita wealth of San Francisco 62% per cent 
greater than the per capita wealth of New York — the richest 
large city in the United States.* 

2. Tax laws of different localities exempt various kinds of 
property, as in Pittsburgh and Philadelphia, where there is no 
direct tax on personal property. The exemption of one or more 
classes of property naturally leaves the property remaining to 
pay a higher rate, regardless of the basis of valuation. 

The best comparison as between cities of similar size is 
found in the absolute amounts of the tax levies. The following 
table shows the tax levies of 1912 in cities with population be- 
tween 400,000 and 600,000: 



City. Population Tax levy. capita tax. 

Cleveland 506,97o $10,019,807 $16.78 

Baltimore 569,560 8,674,255 15.53 

Pittsburgh 550,667 14,696,643 26.69 

Detroit 503,443 9,677,557 19-22 

Buffalo 439,666 9,126,133 21.45 

San Francisco 433,488 10,463,701 24.14 

Milwaukee 400,279 6,859,113 17.14 

The above table is published only to disabuse the minds of that 
portion of the public which has been led to believe the city escapes 
lightly. The more intelligent view is that San Francisco is paying 
a tax, regardless of the per cent basis of valuations, heavier than 
is paid by many cities larger in wealth and population. 

Another statement in the Assessor's published report for 
1913-14 (page 8) is so striking as to demand attention. The 
Assessor writes: 

"A careful comparison of taxation in San Francisco 
with other large cities will show that the tax rate is 
lower than in most cities, and, notwithstanding the in- 
creased expense of the city government due to our great 

♦Census Report, Statistics of Cities, 1911. Table 34. 

tBureau of the Census, Bulletin US: Financial Statistics of Cities, 
Table I. 


loss by fire, increased bonded indebtedness, higher cost 
of all supplies furnished the city, and allowance made 
for additional appropriation to comply with the laws 
passed by the State Legislature, by Charter Amend- 
ments, exemption of property by amendments to the 
State Constitution, and withdrawal of property taxed 
exclusively for state purposes, it would show the cost 
of city government to be less than it was in 1900, the 
year the Charter went into effect." 

A broad statement deserves to be answered with facts, and 
these are supplied in the following brief summary: 

1900 1914 % Increase. 

Budget $5,626,200 $14,916,465 165.17 

Population 342,782 448,200 30.75 

Per capita cost. $16.41 $33.28 102.80 

The Burden on Real Estate. 

If it is true, as represented in the Assessor's reports, that the 
assessed value of real estate in San Francisco is only 50 per cent 
of true value, this city occupies a unique positon: its per capita 
wealth in this form of property is almost double that of the 
average American city of comparable size, and 33 per cent higher 
even than New York City. 

Are there conditions peculiar to San Francisco which make 
real estate (the term including both land and improvements) so 
valuable, or is not the assessed valuation actually higher than 
50 per cent? The following table, compiled from the most recent 
census reports, shows the assessed value, actual value and per 
capita value of real estate in the leading American cities: 


Per capita 

City. Assessed value. Basis. True value. Value. 

New York $7,861,898,890 100% $7,861,898,890 $1,552 

Chicago 670,652,219 25% 2,682,608,876 1,169 

Philadelphia .... 1,554,302,400 100% 1,554,302,400 968 

St. Louis 441,854,410 60% 736,424,000 1,034 

Boston 1,186,491,200 100% 1,186,491,200 1,668 

Cleveland 518,552,210 100% 518,552,210 869 

Baltimore 372,651,502 100% 372,651,502 654 

Pittsburgh 749,583,440 95% 787,062,612 1,428 

Detroit 316,630,290 75% 422,093,720 839 

Buffalo 318,552,250 75% 424,749,664 965 

San Francisco . . . 447,777> 2 37 50% 895,554,474 2,066 

Milwaukee 368,664,865 90% 405,531,351 1,014 

Cincinnati 375,065,680 100% 375,065,680 968 

Average (excluding San Francisco) 1,094 

San Francisco above the average 90% 

It is not density of population which makes the per capita 
value of real estate so high in San Francisco. The following 
table, compiled from the same reports as the preceding table, 
shows for the leading American cities the population per acre 
of land (water area excluded) : 

*Ibid, Table I, pages 19 and 20. 



Land area 

City. in acres. Population. Per acre. 

New York 1 83,555 5,064,237 28 

Chicago 118,232 2,294,711 19 

Philadelphia 83,340 1,606,102 19 

St. Louis 39,ioo 712,027 18 

Boston 27,612 711,128 26 

Cleveland 29,299 596,970 20 

Baltimore 19,290 569,560 29 

Pittsburgh 24,871 550,667 22 

Detroit 26,102 503,445 19 

Buffalo 24,894 439,666 18 

San Francisco 29,760 433,488 14.5 

Milwaukee 15.283 400,279 26 

As compared with other cities on the Pacific Coast, San Fran- 
cisco still leads in per capita real estate values (if the Assessor's 
basis of valuation is correct) as shown by the following table: 


Per capita 

City. Assessed value. Basis. True value. Value. 

San Francisco... $447,777,237 50% $895,554,474 $2,066 

Los Angeles .... 282,162,366 50% 564,324,732 1,462 

Oakland 104,031,900 50% 208,063,800 1,243 

Seattle 176,975,528 45% 392,278,960 1,414 

Portland 226,792,520 60% 377,987,530 1,612 

Both Table VII and Table IX leave out of account the real 
estate owned by corporations taxed for state purposes and desig- 
nated on the assessment roll as "operative property," which real 
estate in San Francisco amounts to more than $45,000,000 at 50 
per cent, or to more than $91,000,000 when brought to full value. 
Inasmuch as similar property is carried on the local assessment 
rolls in practically all of the Eastern cities named in Table VII, 
it would be proper to add this amount to the roll making a com- 
parison, thus bringing the per capita value of San Francisco real 
estate to $2,277, or 108 per cent above the average for the other, 
twelve largest cities. 

It is a question for the real estate experts of the city to 
answer: Are these values supported by the business and 
salaries of the community, or are they, after all, fictitious except 
for taxation purposes? 




The most important function of a city government is its 
use of the taxing power to raise funds for the purpose of its 
several departments. In San Francisco the sums raised annually 
by general taxation for municipal purposes amount to more than 


What is a Budget? 

In theory: A carefully prepared financial program for meet- 
ing all necessary requirements of the public service, with those 
requirements set down in such a way that the public may know 
what kinds of work are planned and how much of each kind. 

In practice: A grab-bag for departments, officials and im- 
provement clubs; a series of detached, unrelated requests from 
bureaus, offices and the public, often purposely inflated; not 
properly summarized or intelligently considered because of patch- 
work classification and catch-all items. 

The San Francisco Budget. 

Viewed in the light of the best modern practice as already 
adopted by the leading American cities, San Francisco's budget- 
making methods are inexact, unscientific and ten years behind the 
times. They would ruin a private business. 

Part of the fault is due to lack of proper accounting and 
reporting; part is due to the absence of inventory and stores 
records, and part to the rule o' thumb practices that have pre- 
vented the installation of uniform departmental estimate sheets. 

It is inconceivable how, under the present system, the Board 
of Supervisors can intelligently make appropriations and fix tax 

Evidence to support the departmental requests, such as unit 
costs of work or services and the number of units neces- 
sary for the coming year, is almost entirely lacking. There is 
no classification by objects of expenditure, such as would show 
how much for operating expense, how much for maintenance, 
how much for permanent improvements, etc. Instead there is 
a segregation based on no clear plan and which is meaningless 
to the public, while affording no protection against extravagance. 

As a work program, in which a fixed and definite amount 
of service is promised to the tax-payers at a fixed and definite 
cost (and promised in such a way that the promise can be 
checked against fulfillment) the San Francisco budget is prac- 
tically worthless. It means little to the Supervisors who approve 
it and nothing to the tax-payers who stand the cost. 


Budget Estimates: 

Of fundamental importance in the administration of public 
funds is the careful and scientific use of the taxing power. To 
this end, the law provides that before the tax levy is made there 
shall be prepared a list of financial needs, or an expense budget, 
in order that the taxing authority may raise the proper amount 
and no more. 

The more accurate and detailed are the estimates, the more 
exact and proper will be the amount of the tax levy. This would 
appear to be of first importance. 

In practice, however, the budget is compiled on the basis of 
memoranda submitted by the several departments and offices to 
the Finance Committee of the Board of Supervisors, giving 
usually only a list of the salaried positions heretofore included 
in the budget and a lump sum for estimated expense. Uniform 
estimate sheets, such as are used in most cities of the size of 
San Francisco or larger, are not provided. 

It is known to be the common practice of the department 
heads to pad their estimates as much as possible in anticipation 
of a horizontal cut by the Finance Committee. Rule o' thumb 
methods lead inevitably to such a practice. 

Draft of Tentative Budget: 

The Finance Committee is satisfied to write into the annual 
budget, involving the expenditure of more than $15,000,000, its 
unsupported judgment without demanding evidence to back up 
its opinions, and the Board of Supervisors is satisfied in the 
main to accept the result. It is true that a sound and careful 
Committee can keep down expenditures in this manner and so 
justify its practice, but if it were composed of less conscientious 
men, or of men who did not possess the same native ability to 
estimate shrewdly, the result would be altogether different. 

Regardless of the personnel of this Committee, however, it 
must be granted that whenever fact-standards can be used in 
place of opinion-standards, whether in public or private business, 
better results are certain to be achieved. 

It follows that any method which provides a foundation of 
evidence in so important a business as budget-making should be 
adopted. It not only would insure the beneficial co-operation 
of the heads of departments and protect the Finance Committee 
against accusations of unfair discrimination and extravagance, 
but it would show the public exactly what is planned to do with 
the money and thus stimulate interest in civic affairs. 

Work Planned Ahead: 

A properly prepared budget would mean that the head of 
every department had applied himself to the task of systemati- 
cally planning his next year's work as accurately as it is pos- 
sible for him to forecast it. What this would mean in the city 
service can only be conjectured. It has been found to be a 


highly satisfactory stimulus to efficiency and economy in other 

Elements of a Proper Budget: 

The main elements of a proper, understandable expense budget 
can be stated simply: 

i. There should be available to the budget-making body (here 
the Finance Committee) a complete workable inventory 
of city property, including lands, equipment, stores, etc., 
and in addition thereto, complete and comparable reports 
from each operating department showing the unit costs 
of work performed. 

2. Preparation of careful estimates by department heads on 

uniform blanks, the estimates segregated by function 
and showing unit costs wherever possible, with compari- 
sons with previous years. 

3. Independent inspection by the Finance Committee of the 

estimates, resulting finally in a decision as to the num- 
ber of units of each kind of work that will be needed 
for the ensuing year. 

4. Classification by the Finance Committee of all budget 

items under the four headings of Administration, Opera- 
tion, Maintenance and Capital Outlay, showing each 
group as follows: 

Administration expense In full detail. 

Operating expense By functions, on the 

unit-cost basis. 

Maintenance expense By objects, with labor 

and material in detail. 

Capital outlay In full detail, to show 

the bona fide exten- 
sions of the municipal 
estate planned for the 
coming year out of 
current revenue. 

5. Publication of a tentative draft of the budget in under- 

standable form, as above. 

6. Public hearings before the entire Board of Supervisors, 

wherein the issues would be strictly joined on such ques- 
tions as the number of units of service or the advisa- 
bility of this or that capital expenditure. 

7. Adoption of the budget and the tax levy. 

Charter Permits This Plan: 

No amendment of the Charter would be necessary to install 
the budget methods outlined above. An order by the Finance 
Committee alone would be sufficient, for the Charter (Article III, 
Chapter I, Section 3) states that 

"the budget shall be prepared in such detail as to the 
aggregate sum and the items thereof allowed to each de- 
partment, office, board or commission, as the Supervisors 


shall deem advisable. Before finally determining upon 
the budget, the Supervisors shall fix such sufficient time 
or times as may be necessary to allow the tax-payers to 
be heard in regard thereto, and the Supervisors shall 
attend at the time or times so appointed for such 

It would be necessary to revise the accounting methods in 
most of the departments in order to produce the necessary in- 
formation, but this revision is in the power of the Board of 
Supervisors (Article II, Chapter II, Section I, subdivisions 40 
and 41). 

Purposes of Classification: 

A properly classified budget goes further than plan the next 
year's work, stimulate officials, minimize extravagance and en- 
lighten the public; it affords the only possible guide for the in- 
telligent direction of public business as a whole. 

Year by year the budget has grown and will continue to grow, 
and with it the tax-rate goes up steadily. Without an elaborate 
analysis of expenditures by expert accountants, the experience 
of the past is practically lost to the budget-making authorities 
and the administrators of the present. 

Is there a definite relation between Administration Expense 
and increased population? Between operating costs and popula- 
tion? Between the expense of maintaining public properties and 
population? What are these relations? How can they be proved? 

Questions of this kind do not enter into the making of an 
unclassified budget, but for each year's increase in expenditures 
the explanation is always made that "growth of population means 
more expense." 

Increased population does not affect all of the city's functions. 
It affects some of them more than it does others. It is reason- 
able to assume that under a classified, functionalized budget there 
would be developed in practice within two or three years certain 
definite rates of increase in the several operating departments, 
which rates would be an invaluable guide in the making of future 

Roughly, the expense under the four headings of Administra- 
tion, Operation, Maintenance and Capital Outlay should advance 
approximately as follows: 

Administration expense Very slowly, if at all. 

Operating expense According to the defi- 
nite number of units 
of work or service. 

Maintenance expense Depending upon the 

increase in the num- 
ber of new properties 
to be maintained. 

Capital outlays AS THE CITY CAN 



To a large extent, the annual increases under the first three 
headings would come to be governed by fixed laws depending 
more or less upon growth in population. The amount needed 
for capital outlays, including permanent improvements of all 
kinds, equipment, machinery, etc., could be made to depend upon 
the state of business and industry as a whole; in times of pros- 
perity, when the tax rate is a comparatively small factor, ex- 
tensive outlays would be possible; in times of depression, the 
city could retrench intelligently. 

Application of Unit Costs: 

Practically one-half of the general fund budget, authorizing 
the expenditure of nearly $4,300,000, is composed of unsegre- 
gated, unclassified items in amounts arbitrarily fixed by the 
Finance Committee. Many of these appropriations cover in 
single items the expense of administration, operation, mainte- 
nance and capital outlay, although with few exceptions they could 
be broken up and distributed under the proper headings. 

In this list are the following items (as copied directly from 
the budget for the fiscal year 1914-15): 

Number Purpose Amount 

17. Finance Committee Expenses $10,000. 

18. Supplies Committee Expenses 3,000. 

19. Printing Public Documents, etc 23,000. 

20. Advertising 31,500. 

24. Stationery, Books and Printing, etc 45,ooo. 

25. Stationery for the Assessor 5, 500. 

26. Maps for Tax Collector and Assessor 8,000 

28. Furniture, Public Buildings 9,000. 

34. Urgent Necessities 90,000. 

35. Rents, Repair and Equipment of Buildings 76,500. 

36. Water for Municipal purposes, hydrants 132,000. 

37. Water for Buildings 23,000. 

38. Maintenance of Minors 1 78,000. 

39. Maintenance of Widows' Pension Bureau 107,000. 

44. Lighting of Streets and Public Buildings 465,000. 

45. Purchase of Rights of Way 15,000. 

47. Gasoline for City Automobiles 2,500. 

58. For Paving, Repaving, Grading, Constructing and 

Repairs to Streets, for Construction of, Recon- 
struction of and Repairs to Sewers, and for 
Construction of and Repairs to Public Build- 
ings and other structures except school build- 
ings and including the following items: (speci- 
fied items aggregating only $67,500) 1,150,000. 

59. For Reconstruction and Equipment of Fire De- 

partment Buildings 95,000. 

61. For the Construction, Reconstruction, Fire Es- 
capes, Repairs to and Equipment of School De- 
partment Buildings 194,000. 

65. For the Expense, Maintenance and Cleaning, 

Sprinkling and Sweeping of Streets 360,000. 

66. Accident Insurance, City Employes 60,000. 

88. Auditor — Extending Assessment Roll 5,ooo. 


95- Assessor — Extra Clerks, Charter 40,000. 

96. Assessor — Extra Clerks, Additional . 6,000. 

97. Assessor — Poll Tax Collectors 5,ooo. 

98. Assessor — Field Deputies' Expenses 2,000. 

113. Coroner — Coroner's Expenses 2,500. 

120. Recorded — Copyists 40,000. 

133. Tax Collector — Extra Clerks 6,220. 

162. City Attorney — For General Litigation 6,000. 

176. District Attorney — For extraordinary expenses of 

the District Attorney's office, subject to orders 

of Court through the Board of Supervisors.... 6,000. 

206. Juvenile Detention Home, Maintenance 8,600. 

246. Sheriff — Subsistence of Prisoners 45,ooo. 

247. Sheriff — Sheriff's Expenses 2,560. 

274. Police Department — Maintenance of Police Patrol 

and Mounted Police 28,600. 

275. Police Department — Police Miscellaneous — Pho- 

tographic Supplies, Laundry, Fuel, etc 3,ooo. 

276. Police Department — Maintenance of Automobiles 

and Patrol Wagons 8,000. 

277. Police Department — Subsistence of Prisoners 8,000. 

278. Police Department — Maintenance of Motorcycles. 2,500. 
278b. Police Department — Maintenance Police Launch. 1,500. 

282. Civil Service Commission — Expenses 12,500. 

283. Civil Service Commission — Inspection 5>ooo. 

284. Playgrounds Commission — (Paragraph specifies 

the several approved playgrounds) For Sal- 
aries and Administration 36,075. 

285. Playground Commission — Equipment, Mainte- 

nance and Improvement 30,000. 

360. Board of Public Works — For inspection of streets 

and sewers under contract 18,600. 

388. Board of Public Works — Maintenance Municipal 

Water Works 2,700. 

389. B. P. W. — Transportation, Buggies or Auto Ren- 

tal 10,860. 

391. B. P. W. — Automobile Maintenance 2,500. 

392. B. P. W. — Supplies ' and Maintenance, including 

Janitors' supplies, fuel oil, electric power, en- 
gineer's sundries, lamps, etc., Repair and up- 
keep of Elevators and Engines 13.000. 

393. B. P. W. — General Supplies 2,500. 

394. B. P. W. — Bureau of Engineering Supplies 5- 000 - 

395. B. P. W. — Maintenance and Supplies Photostat 

Room 3.000. 

396. B. P. W. — Fuel Oil and Maintenance, Garbage 

Disposal Plant 5.000. 

415. Health Department — Expenses 13.000. 

476 — San Francisco Hospital — Maintenance 85,000. 

477 San Francisco Hospital — For additional expenses 
for maintaining new Hospital if opened dur- 
ing fiscal year 20,000. 

501. Tubercular Hospital — Maintenance 51,000. 

513. Isolation Hospital — Maintenance 13, 74°- 

525. Emergency Hospitals — Maintenance 14.850. 

561. Relief Home — Maintenance 136,000. 

621 Fire Department — Maintenance 170,000. 


622. Fire Department — For purchase of Fire Fight- 
ing Apparatus and Hose 80,000. 

649. Department of Electricity — Maintenance, Exten- 

sions and Equipment 35>ooo. 

650. Department of Elections — General Elections 221,000. 

Salary Itemization in Budget: 

A large part of the personal service regularly paid for out 
of the general fund is itemized in the present budget, but there 
is absolutely nothing to show, in any operating department, 
how the salary expense is related to the amount of work planned. 

Originally, the itemization of salaries was made to prevent 
the padding of pay-rolls. There has grown out of it, however, 
a new abuse which is reflected in the attitude of several mem- 
bers of the Board of Supervisors who object to the creation 
of "budget positions," as they are called when so itemized, 
because of the difficulty in abolishing them when the need is 
at an end. The holders of such positions bring the influence 
of their friends to bear upon the members of the Board, and 
it has been found practically impossible to vote out positions 
so designated in the budget. 

There has grown up, therefore, the practice of paying for 
personal service out of money appropriated under the heading 
of "expenses." 

Thus, for example, two assistant superintendents in the 
street repair department are paid $1,800 a year each from 
Budget Item Number 58. Many other regular employes in the 
bureaus of streets, buildings and sewer repairs are also paid 
from this blanket item. For some reason, not explainable by 
charter or ordinance, they are not designated in the budget, 
while certain of their fellow employes are so designated. 

As an example of the practical difficulty of abolishing a 
budget position attention may be directed to the six road guards 
at the County Jail (Budget Item Number 237). Several attempts 
to abolish these positions have been made by the Finance Com- 
mittee, on the ground that they are not needed, but without 

In the 1914-15 budget, individual itemized salaries amount 
to the following totals in the several divisions of the city gov- 

Board of Supervisors and Clerks $86,160. 

Mayor's Office 17,520. 

Auditor's Office 33,820. 

Assessor's Office 48,200. 

Coroner's Office 23,980. 

Recorder's Office 31,600. 

Tax Collector's Office 61,080. 

Treasurer's Office 27,100. 

Superior Courts 81,320. 

City Attorney's Office 36,200. 

District Attorney's Office 58,700. 


County Clerk's Office 107,800. 

Justices' Courts 28,800. 

San Francisco Law Library 4,800. 

Juvenile Detention Home 7,680. 

Juvenile Court 27,900. 

Widows' Pension Bureau 5,040. 

Sheriff's Office and Jails 102,200. 

Police Department 1,474,828. 

Police Courts 24,000. 

Civil Service Commission 3,600. 

Board of Censorship 600. 

Sealer of Weights and Measures 9,600. 

Board of Public Works 365,400. 

Health Department — 

General Office 25,620. 

Inspection Bureau 85,260. 

Laboratory 10,620. 

San Francisco Hospital 61,344. 

Tubercular Hospital 23,840. 

Isolation Hospital 16,164. 

Emergency Hospitals 75,372. 

Relief Home 49,920. 

Fire Department 1,263,325. 

Corporation Yard 90,732. 

Fire Department additional 35,66i. 

Department of Electricity 75,246. 


The itemized list is by no means inclusive of all regular sal- 
aried positions in the city service, paid from the general fund. 
The budget items that are in part, at least, lumped pay-rolls 
are as follows: 

Number Appropriation Amount. 

17. Finance Committee Expenses $ 10,000 

18. Supplies Committee Expenses 3, 000. 

58. Repairs streets, buildings, sewers, etc 1,150,000. 

59. Reconstruction Fire Dept. buildings 95,000. 

61. Repairs, equipment, etc., School buildings 194,000. 

65. Sweeping streets, etc 360,000. 

97. Assessor — Poll tax collectors 5,ooo 

120. Recorder — Copyists 40,000. 

162. City Attorney — General Litigation 6,000. 

176. District Attorney — Extraordinary expense 6,000. 

246. Sheriff — Subsistence of Prisoners 45,000. 

282. Civil Service Commission — Expenses 12,300. 

283. Civil Service Commission — Inspection 5.000. 

284. Playgrounds Commission — Administration 36,075. 

285. Playgrounds Commission — Equipment, etc 30,000. 

388. Maintenance Municipal Water Works 2,700. 

649. Department of Electricity 3 5. 000. 

650. Department of Elections 221,000. 



Functional Segregation Possible. 

The Departments or branches of the city government which 
could and should segregate their items of expense under the 
headings of administration, operation, maintenance and capital 
outlay are the following: 

Board of Works. 

Police Department. 

Fire Department. 

School Department. 

Sheriff's Department, including jails. 

Health Department. 

Park Department. 



Department of Electricity. 

Department of Elections. 

Juvenile Detention Home. 

Widows' Pension Bureau. 

Assessor's Office. 

The Departments that should ask and receive appropriations 
on a strict unit cost basis, provable by accurate records and 
statistics are the following: 

1. Health Department: 

(a) Each kind of inspection service. 

(b) Each hospital. 

2. Juvenile Detention Home. 
3- Jails. 

4. Fire Department: 

(a) Repair of apparatus. 

(b) Maintenance of engine houses. 

5. Board of Public Works: 

(a) Street construction and repairs. 

(b) Street cleaning. 

(c) Building repairs and maintenance. 

(d) Sewer construction and repairs. 

(e) Building Inspection. 

(f) Garbage disposal plant. 

6. School Department: 

(a) Maintenance of Buildings. 

(b) Instruction. 

7. Park Department. 

8. Police Department: 

(a) Kinds of service rendered. 

(b) Maintenance of stations. 

(c) City jail. 

9. Playgrounds. 



In its broadest aspect, the budget simply apportions to the 
several continuing funds into which the city's finances are 
divided by law the revenues of the year. These funds are: 

The bond interest and redemption funds. 

School fund. 

Park fund. 

Library fund. 

Firemen's Relief and Pension fund. 

General fund. 

The Special Funds. 

With respect to all but the general fund, there is a similar- 
ity which permits them to be grouped for purposes of explana- 
tion. The special funds are each 

(a) supported by direct tax levy for specific purposes; 

(b) under the absolute control of independent commissions; 

(c) subject to charter regulation as to amount, leaving the 

Supervisors to exercise their judgment within narrow 

(d) continuous, i. e., retain their identity from year to year. 

In framing the budget, the Supervisors make no attempt to 
segregate these funds, except in the case of the School Fund, 
where only a nominal segregation is made, subject to amend- 
ment by the independent Board of * Education. The special 
funds in the 1913-14 budget were as follows: 

Bond Interest and Redemption Funds $2,732,538. 

School Fund 1,868,280. 

Park Fund 366, 100. 

Library Fund 95,000. 

Firemen's Relief and Pension Fund 85,000. 

Total special fund $5,146,918. 

or 36 per cent of the total budget. 
The General Fund. 

The variable expenses of the city government are met from 
the general fund, where the principles of right budget-making 
could be applied in planning the expenditure of more than 
$9,000,000 annually. The budget not only apportions revenues 
to the general fund, but it appropriates the money from this 
fund for specific purposes, and serves as an authorization for 
the administrative officers to spend. 

To the extent, therefore, that the budget is to check the 
inefficient or incompetent officer, and at the same time not 
interfere with the capable department manager, it should specify 
or appropriate exact amounts based on a knowledge of exact 
needs. If it is to function as a work program, in which a defi- 
nite amount of measurable service or other value is promised at 


a definite cost, it is necessary to relate the proposed expendi- 
tures, whether for salaries, wages, supplies or materials, to the 
amount of work that is to be done. This is called the principle 
of "functional segregation," and is widely different from the 
departmental segregation on which the San Francisco budget is 
largely based. 

Bases of Appropriations. 

In the San Francisco budget, it is the accepted practice to 
allow a certain amount to each office, department and institu- 
tion, which amount is usually broken up into an itemized salary 
list and a "lump sum" for "maintenance," meaning thereby all 
supplies, materials, equipment and wages not otherwise expressly 
provided for. The salaries fixed by the Charter, or which the 
Supervisors control by ordinance, are itemized in the budget; 
salaries controlled by the administrative departments sometimes 
are itemized, as in the Health Department and the Department 
of Public Works, and sometimes not, as in the Playgrounds De- 
partment. In 1913-14, the Board of Public Works chose to 
abide by the itemization imposed by the Supervisors; the Board 
of Health did not. 

Some services have been centralized and are paid for out of 
single appropriations, such as the furnishing of all light and 
water, stationery, etc., the payment of rent for those departments 
occupying rented quarters, and (theoretically) all repairs to 
buildings. Certain other appropriations are required to be made 
by Charter or state law. 

From the nature of the considerations governing the making 
of the appropriations, the items composing the 1913-14 budget 
may be grouped under the following eight headings: 

(A) Appropriations to departments that have full and undis- 

puted control over expenditures, subject only to Char- 
ter and state law. 

(B) Appropriations for salaries and wages (itemized) in mu- 

nicipal departments, where control by administrative 
boards is sometimes disputed. 

(C) Appropriations in "lump sums" for general supplies, sub- 

sistence, equipment and maintenance in municipal de- 
partments, including jails. 

(D) Appropriations for county offices, including itemized sal- 

aries as fixed by Charter and ordinance, and unsegre- 
gated incidental expense accounts. 

(E) Appropriations for specified articles of equipment. 

(F) Appropriations in "lump sums" for centralized service 

controlled by the Board of Supervisors. 

(G) Appropriations for specific permanent improvements and 

other definite purposes outside of the usual routine. 
(H) Appropriations for miscellaneous routine expenses re- 
quired to be made by Charter, state law, custom or 


In the following discussion of the several classes of appro- 
priations, some notes have been set down which tend to explain 
the underlying causes of the increasing expense of the city 
government. Each class will be considered separately: 


In this class there is only the Department of Elections, which 
in 1913-14 received $275,000 in a lump sum. Expenditures are 
regulated by Charter and state law. As showing the inaccuracy 
of this estimate, there was a credit balance in this appropria- 
tion at the end of the year amounting to more than $44,000, 
which was re-appropriated by the Supervisors before it could 
revert to the "Surplus Fund" and become applicable to the reduc- 
tion of taxes. 


Itemized salaries and wages in the following total amounts 
were appropriated to the municipal departments named, but with 
no division showing to what extent they were a part of the 
city's expense of administration as distinct from the expense of 
operation, or maintenance as distinct from either of these; also, 
in framing the schedule, little attention was given to the amount 
of work to be performed, as will be shown hereafter. The total 
salary rolls follow: 

Police Department $1,455,520. 

Fire Department 1,343,038. 

Department of Public Works 371,600. 

Health Department 344,264. 

Department of Electricity 73,146. 

Playgrounds Department* 36,075. 

Civil Service Commissioners 3,600. 

Board of Censorship 600. 

Total $3,627,843. 

Salaries of policemen and firemen and of the members of the 
Civil Service Commission are fixed by the Charter; the salaries 
of other employes in these departments and in the Department 
of Electricity are fixed by ordinance. 

In the Board of Public Works, only the salaries of the 
Commissioners and their Secretary are fixed by Charter, the 
Board itself having the technical right to create positions and 
fix the compensation thereof, but by agreement it accepts the 
budget salaries established by the Supervisors. The Board of 
Health, which is in virtually the same position, ignored the 
budget itemization in 1913-14. All salaries in the Department of 
Electricity are fixed by ordinance once a year and arc therefore 
controlled absolutely by the Supervisors. The Playgrounds Com- 
mission creates positions and salaries at will within the limits 
of its appropriation. 

•Not itemized. 


Police Department. 

Making up the salary budget for the police department con- 
sists largely in guessing at the number of additional policemen 
to be included at $1,464 a year (the highest police salary paid 
by any city in the United States). No inquiry is made into the 
assignment of the members of the force, and consequently 
it is found (see Departmental Survey of Police contained 
herein) that a surprising number of patrolmen at $1,464 a year 
are detailed for inside office work, or as guards at the city 
jail or as general messengers in various municipal depart- 
ments, where their duties are such that they could be performed 
as well, or perhaps better, by employes who would not need to 
meet the relatively high requirements of regular members of the 

Thus, for example, five patrolmen serve as clerks in the 
property and evidence bureau, seven serve as clerks in the 
general administrative office, six serve as clerks in the bureau 
of warrants and licenses, two in the business office, six in the 
identification bureau and three are "photographers" in the pho- 
tograph gallery. In the city prison, thirteen patrolmen act as 
guards with salaries of $1,464 each, when guards at the county 
jail are paid but $600, or considerably less than half. Thirty- 
two patrolmen and one corporal are detailed to municipal de- 
partments, where some of them have serious work to perform, 
while most of them are simply messengers or guards. 

In view of the fact that San Francisco pays the highest police 
salaries and provides liberally for old age and relief pensions, 
civilian clerks, messengers and watchmen at lower wages should 
be employed for this work. The budget-makers could provide 
for this change and effect a saving of thousands of dollars 

Department of Public Works. 

The salary expense of this department illustrates vividly the 
result of failing to segregate the items of administration, opera- 
tion and maintenance at budget-making time, which leads inevi- 
tably to the gradual, and perhaps unrealized, advance in "over- 
head" salaries. New positions have been created and salaries 
increased — usually without reference to the amount of operating 
or maintenance service that is to be rendered that might call 
for additional administrative service. 

Thus the itemized salary expense of the Board of Public 
Works and its Bureaus (exclusive of new functions added since 
1910) grew from $233,580 in the budget of 1909-10 to $357,400 in 
the budget of 1914-15 — an advance of more than 50 per cent in 
five years. 

These totals do not include the clerks, stenographers, engi- 
neers, architects, draftsmen, inspectors, watchmen and other 
employes who are paid from bond funds and whose work is 
related to specific permanent improvements which the city is 


The totals do not include, either, many positions which, while 
of a permanent nature, are not itemized in the budget but are 
paid from blanket "repair" accounts. These positions are mostly- 
additional bureau superintendents, assistants, clerks and watch- 
men added in the last three or four years. According to the 
Auditor's report for 1909-10, the total expense of these extra- 
budgetary positions in that year was $19,739. On the basis of 
the June, 1914, payroll, the expense of the same class of posi- 
tions had risen to $47,610 in 1913-14, an advance of 140 per cent. 

Bureau of Street Repair. 

Without an exhaustive analysis of the accounts of the Board 
of Public Works and its bureaus, it would be impossible to seg- 
regate the salary items so as to show separately the expense of 
administration, or "overhead," and the salaries or positions prop- 
erly chargeable to operation or maintenance. In some of the 
Bureaus, a more or less complete segregation can be made, as 
in the Bureau of Street Repair, where, according to the Auditor's 
report for 1909-10, the total salary expense for the superintend- 
ent, his assistants, clerks, stenographers, time-keepers and watch- 
men (all salaries except wages of labor) was $15,625. In 1913-14, 
the total comparable salaries had risen to $26,088. In place of 
one Superintendent at $2,400 a year and one assistant at $1,800, 
there had come to be one superintendent at $3,000, one assistant 
at $2,400 and two assistants at $1,800, together with a Team Fore- 
man at $1,800, a Superintendent of Stone Paving at $2,100 and 
a Foreman Paver at $2,100. The expense of watchmen in 
1909-10 was $1,260. In 1913-14 (on the basis of the June pay- 
roll) it had risen to half this sum, or $630, a month, amounting 
to $7,560 a year. 

Bureau of Buildings. 

Another example of the growing salary expense of the Board 
of Public Works, illustrating the need of framing the budget 
with a view to the amount of work that is to be done, is found 
in a comparison of the salary expense of the Bureau of Build- 
ing Inspection for the fiscal year 1909-10 and the fiscal year 


It is the function of this Bureau to examine and pass upon 
all plans and specifications for buildings for which construction 
permits are asked, and to inspect the buildings during construc- 
tion to see that the laws are complied with. A fee is collected 
which varies with the value of the building, and the total of 
fees, therefore, affords a reasonable measure of the Bureau's 

The period following the fire was one of great activity and 
the fees collected in 1908-09 amounted to more than $51,000. 
On this basis, the makers of the 1909-10 budget provided $25,500 
for the salary expense of the Bureau, of which $22,928 was spent. 
(Fees collected during the year had fallen to $37,000.) 

Since 1910, the collection of fees and, of course, building 


activity, have decreased steadily, yet the salary expense of the 
Bureau of Building Inspection has increased. Last year (1913-14) 
the salary expense of this Bureau was $30,900, while the fees 
collected amounted to less than $26,000. The estimated fees for 
1914-15 amount to $24,000, although the salary list of last year 
was carried forward into the budget of the present fiscal year 
without a change. 

Showing the comparison in another way: In 1909-10, the 
salary expense of the Bureau of Building Inspection came to 
61 per cent of the fees collected; in 1913-14, it came to 120 per 
cent of the fees. 

Bureau of Street Cleaning. 

Finally, a third example of growing overhead expense in the 
Board of Public Works is set down: the salary expense of the 
Bureau of Street Cleaning. 

Each year there is appropriated a lump sum covering the 
total expense of this Bureau, out of which all salaries, wages and 
supply, material and equipment accounts are paid. In 1909-10, 
the total expense of cleaning and sweeping streets was $263,069, 
of which $4,125 was "overhead," including the salaries of the 
superintendent, timekeeper and watchman. In 1913-14, $350,000 
was spent, of which $18,180 was "overhead." Thus, while total 
expenditures increased 33 per cent, the overhead expense in- 
creased 340 per cent. 

That the systematic padding of payrolls could be carried on 
if the objects of the several appropriations were considered prop- 
erly at budget-making time is not believable. It is possible only 
when salaries of all kinds are lumped together indiscriminately, 
without regard to the amount of work to be done. 

At the close of the last fiscal year, there were salary bal- 
ances with nothing to offset them in the police, fire, electricity 
and public works departments amounting in the aggregate to 
$75,000. (Salary balances in the Department of Public Works 
were the result of appropriating $22,820 to run the Garbage 
Disposal plant, which was never accepted, and the unused por- 
tion of a lump-sum appropriation of $18,600 for the inspection 
of streets and sewers under contract.) Instead of being used 
to reduce taxes, this $75,000 also was "re-appropriated" for other 
purposes, as will be shown hereafter. 


Blanket "Maintenance" appropriations were made in the fol- 
lowing amounts to municipal departments and institutions, in- 
cluding jails: 

Health Department "expenses" $12,500. 

Sheriff "subsistence of prisoners" 45,000. 

Juvenile Detention Home "maintenance" 8,000. 

Main Hospital "maintenance" 78,000. 

Relief Home "maintenance" 129,000. 

Tuberculosis Hospital "maintenance" 46,000. 


Isolation Hospital "maintenance" 14,000. 

Emergency Hospital "maintenance" 13,500. 

Fire Department "maintenance" 160,000. 

Fire Dept. "purchase of apparatus and hose" 100,000. 

Playgrounds "equipment, maintenance and improvement" 30,000. 

Total $636,000. 

The supply and maintenance appropriations for the Police, 

Electricity and Public Works departments are broken up into 
several items, as follows: 

Dept. of Electricity: 

"Extensions and Equipment" $15,000. 

"Reconstruction" 15,000. 

Police Department: 

"Maintenance of Police Patrol and Mounted Police" 30,000. 

"Maintenance of Automobiles and Patrol Wagons".. 8,000. 

"Maintenance of Motorcycles" 2,500. 

"Maintenance of Police Launch" 1,500. 

"Subsistence of Prisoners" 8,000. 

"Police Miscellaneous" 3,000. 

Department of Public Works: 

"Supplies and Maintenance" (janitorial) 12,000. 

"Transportation, Buggies" 11,880. 

"Car Fare" 2,000. 

"Transportation, Autos" 3,000. 

"Bureau of Engineering Supplies" 5,000. 

"Maintenance and Supplies, Photostat Room" 2,500. 

"Maintenance Garbage Disposal Plant" 5,000. 

"Maintenance Municipal Water Works" 2,700. 

"General Supplies" 2,500. 

Total $129,580. 

GRAND TOTAL $765,580. 

Not Related to Needs. 

These appropriations, as they stand in the budget, are related 
in no way to the amount of work that is to be performed or to 
the new equipment that is to be added to the city's property. 

From practically all of the items in the first division (above) 
except the appropriation for new apparatus for the fire depart- 
ment, expenditures are made that are properly allowable as 
expense of administration, operation, maintenance and capital 
outlay. One year, extra building repairs may be a heavy drain 
upon the "maintenance" account; another year, the same insti- 
tution may lay up a supply of blankets or crockery to last far 
into the future. 

These appropriations are not made as the sum of various 
elements, such as the normal unit cost of feeding prisoners, 
multiplied by the expected number of prisoners: the normal 
expense of maintaining a team of horses, multiplied by the num- 
ber of teams; the normal fuel expense of an engine house, 

4 8 

multiplied by the number of houses, etc. The consideration 
that has most weight with the budget-makers is the amount of 
the previous year's appropriation, apparently regardless of what 
was bought with it. 

It is not customary for the department or institution man- 
ager to leave a surplus in his maintenance appropriation at the 
end of the year. Thus, for example, all of the hospitals and 
jails came out either exactly even or a little in debt at the end 
of the year (although stores records, if they were kept, would 
indicate in some cases how the balance had been applied). The 
Fire Department, with $160,000 at its disposal, spent all but $44. 
The Playgrounds Department approached the close of the fiscal 
year with about half of its maintenance appropriation un- 
spent, but in June it spent approximately $10,000 out of the total 
of $30,000. 

Some of the institutions undertake to arrive at unit costs by 
dividing their total expense for "maintenance" by the number 
of inmate-days, and use the result as a basis for their next 
year's budget estimate. Obviously, if anything like a correct 
basis is to be reached, only operating expense as such will be 
divisible, plus an amount for depreciation, which can be esti- 
mated with fair accuracy. Extra supplies and stores, new equip- 
ment, extraordinary repairs to buildings, etc., should be ex- 
cluded from the calculation. 

Using the Surplus. 

Thus at the Tuberculosis Hospital, the entire maintenance 
appropriation of $46,000 was spent in 1013-14, although there 
was a large supply of new blankets, toweling, bedding and new 
beds on hand at the end of the year, purchased out of what 
otherwise would have been "surplus." This use of the surplus, 
in the absence of stores accounts or an adequate inventory 
taken at budget-making time, made the unit operating costs for 
1913-14 greater than they were in fact, and secured for the hos- 
pital an appropriation for the new year in which was included 
money to buy articles already on hand. 

That is, the appropriation for 1914-15 (the present fiscal 
year) was based on the probability of having to care for 200 
patients at a per capita expense based on last year's expendi- 
tures. By reason of the equipment that was in stock at the 
beginning of the year, the new appropriation of $51,000 will be 
sufficient to care for approximately 225 patients, if nceessary, 
and make a number of alterations and repairs. 

There is no reason to doubt that the money is being expended 
with honesty and good judgment, although this does not change 
the fact that in principle this practice is wholly wrong. It 
serves to illustrate how inadequate and inexact is the informa- 
tion on which the budget-makers base their decisions as to the 
amounts of the maintenance appropriations. 

Nearly all of the segregated appropriations to the police, 
public works and electricity departments ended the year with 


a surplus, indicating the advantages of even a crude segrega- 
tion. In a proper budget, even these appropriations would be 
broken up and distributed among the several functions to which 
they are chargeable, instead of being charged in a lump sum 
to the department, which may have several functions. 


Into this class fall the county offices which exist as a neces- 
sary part of the governmental machine, as prescribed by Char- 
ter or state law. The heads of these offices (with some minor 
exceptions) are elected, although the duties of most of them are 
purely administrative. 

Recognizing the obvious fact that unlimited "patronage" 
invariably tends to increase the expense of elective offices, the 
framers of the Charter undertook to curb this evil by prescrib- 
ing the exact number of deputies, clerks, assistants and other 
employes in each of the county offices, together with their indi- 
vidual salaries. 

Most of the salary expense of these offices is distinctly 
"overhead" and cannot easily be measured in terms of work 
performed. Thus, the Coroner's office must maintain its organi- 
zation constantly, whether the inquests are many or few. The 
offices of Treasurer, County Clerk, City Attorney, District At- 
torney, Sheriff and Mayor must be maintained whether their 
work is relatively heavy or relatively light, and so, too, with the 
office of the Auditor, Tax Collector, Assessor and Recorder, 
although these four are given allowances for "extra clerks" for 
seasonal work. 

The Charter salaries, except for the offices of Assessor and 
Recorder, date from 1900. Unquestionably the work in some of 
the offices has increased since then, but in the absence of intens- 
ive departmental studies it is impossible to determine whether 
the salary expense of a given office is too high or too low.* 

Great Increase in Expense. 

Year by year additional employes other than those allowed 
under the Charter have been added to the salary rolls of the 
county offices by the budget-makers upon request of the county 
officers. A comparison of the salary expense of deputies, assist- 
ants and clerks in the offices of the Board of Supervisors, Mayor, 
Auditor, Coroner, Tax Collector, Treasurer, Justices' Courts, 
District Attorney, City Attorney, County Clerk and Sheriff (ex- 
cepting court-room clerks and bailiffs) in 1900-01, the year the 
Charter went into effect, with 1913-14 shows there has been an 
increase of 58 per cent. In 1900-01, this expense amounted to 
$261,420; in 1913-14, it amounted to $414,000.! 

♦There is presented elsewhere in this report such a departmental study 
of the Sheriff's office, which shows several positions there could be abol- 
ished without loss of efficiency or service. 

tThe offices' of Assessor and Recorder were not included in the above 
computation, for the reason that the charter was amended since 1901 so as 
to allow them additional employes. 


The itemized salaries allowed in the 1913-14 budget to the 
several county offices and departments under this heading came 
to the following totals, with appropriations for "expense" shown 
in a parallel column (extra clerks not included here): 

Salaries Expenses 

Supervisors and clerks $84,060. $13,000. 

Superior Courts 52,080. 

Justices' Courts 28,800. 

Police Courts 24,000. 

Juvenile Court 27,420. 2,400. 

Juvenile Detention Home 7,320. 

Law Library 4,800. 

Sealer of Weights and Measures 4,500. 1,080. 

Mayor 17,400. 1,74°. 

City Attorney 36,200. 5,000. 

District Attorney 54,800. 5,000. 

Auditor 33,700. 400. 

Assessor 48,200. 2,000. 

Coroner 23,680. 2,700. 

Recorder 31,600. 

Tax Collector 48,580 700. 

Treasurer 24, 100. 

County Clerk 107,800. 

Sheriff 102,200. 2,500. 

Totals $761,240. $36,520. 

Public's Wishes Disregarded. 

Certain of the county officers proposed Charter amendments in 
1912 materially increasing the number and salaries of their depu- 
ties and assistants, which amendments were all defeated. A way 
was found, however, to employ the additional deputies, although 
authority therefor had been denied by the voters. In the follow- 
ing table the Charter salary allowance, the totals asked by each 
office in the defeated Charter amendments and the totals provided 
in the 1914-15 budget are set down: 

Office.* Charter Defeated Amendment 1914-15 budget. 

Auditor $13,600. $35,300. $33,820. 

Coroner 16,000. 26,900. 23,980. 

Tax Collector . . . 31,300. 63,800. 47,380. 

Treasurer 11,200. 25,100. 27,100. 

County Clerk.... 75,400. 110,900. 107,800. 

Sheriff 82,400. 104,300. 102,800. 

No Charter amendments creating new positions or raising sal- 
aries were asked in the other county offices, although without 
exception they have far exceeded the original Charter authoriza- 
tion also, as shown by the following comparison: 

Office Charter Allowance Budget Allowance 

Mayor $10,200. $17,520. 

City Attorney 20,300. 36,200. 

District Attorney 29,300. 58,700. 

Justices' Court attaches 8,400. 10,800. 

♦Amendments relating to the Assessor's and Recorder's office were pro- 
posed, but without changing the totals for these offices 1 , so they were not 
included in this table. 


Salaries of clerks in the office of the Board of Supervisors 
are not fixed in the Charter, but the right rests with the Board 
itself to create positions and fix salaries. 

In the fiscal year 1900-01, the salary expense of the Clerk of 
the Board and his assistants, clerks, stenographers, etc., amounted 
to $21,100. This had increased to $24,085 in the fiscal year 
1906-07 and to $41,760 in 1914-15, which sum does not include 
salary expense of $2,700 paid from an appropriation entitled 
"Supplies Committee Expenses," making the total salary ex- 
pense of the Clerk and his assistants amount to $44,460, or 85 
per cent more than fourteen years ago. (Note I.) 

General Summary, Class "D." 

The extraordinary increase in the salary expense of the 
county offices (at a rate considerably in excess of the increase 
in population) suggests again the need of establishing a rela- 
tionship between salaries and the amount of work that is to be 

In all lines of private enterprise in the past fifteen years the 
proportion of "overhead" expense to total expense has been 
reduced rather than increased, but labor-saving devices and 
methods can never be installed in public offices as long as every 
position is a "vested interest," to which the incumbent, or the 
officer who appointed him, has an inherent right. 

Other cities have worked out simplified methods for the 
transaction of public business and have installed them with 
great saving to the public. Only recently, the Assessor's office 
in San Francisco has provided a means of shortening the time 
and labor of writing tax bills by doing away with the old 
descriptions of real estate and substituting lot and block numbers, 
but his energy and labor go for naught if the same number of 
clerks as heretofore take the same length of time to write the 
same number of bills. Neither in the budget of 1914-15 nor in the 
budget of 1915-16 has the expense of clerks been decreased. 

Intensive studies of every office and department, which would 
disclose the duties of every employee and whether he was idle 
or busy, would show the way to save hundreds of thousands of 
dollars in San Francisco. Similar results have been obtained 
elsewhere — New York, Milwaukee, Cincinnati, Pittsburgh, Phila- 
delphia, etc.; but first these cities had to give up the "vested 
interest" idea of public service. 


There were eight items in the 1913-14 budget appropriating 
money for specific articles of equipment, amounting in all to 
$26,997, as follows: 

Note 1. — The number of idle clerks in the office of the Board attracted 
the attention of the now incumbent Finance Committee, which in its 
budget report to the Board under date of April 27, 1014, stated there was 
an unnecessary number of clerks, and recommended that three be trans- 
ferred to some other department or office. Nothing- has been done in the 
matter, however. 


Police Department, two auto patrol wagons $9,000 

Police Department, 5-passenger automobile 2,100 

Public Works, two autos, time keeping department 1,600 

Health Department, auto ambulance, main hospital 5,000 

Health Department, auto ambulance, emergency hospitals.. 5,000 

Health Department, motor truck for Relief Home 2,500 

Health Department, sterilizer for emergency hospitals 325 

Health Department, cold storage plant, Isolation hospital.. 1,472 

This itemized list is by no means inclusive of all the new 
equipment added to the city's property, or intended to be added 
at budget-making time. It does not even include all auto- 
mobiles, for during the fiscal year additional cars were pur- 
chased for the Mayor and Board of Supervisors, and motor 
trucks were bought for the Street Repair Bureau, but these 
were paid for out of "blanket" or miscellaneous accounts. 

The partial itemization of equipment needs, as it exists in 
the San Francisco budget, merely emphazises the necessity of 
adopting systematic methods. 


More than one-quarter of the total general fund budget is 
appropriated for expenses that have been centralized under the 
control of the Board of Supervisors. Thus all charges for 
lighting the various public buildings, for rents, for water, re- 
pairs to buildings and for printing, stationery and even gasoline 
for city automobiles (except in some departments) are paid out 
of central lumped appropriations instead of being paid out of 
the operating accounts of the several departments. 

The appropriations of this nature in the 1913-14 budget were 
as follows: 

Repairs to streets, sewers and buildings (Item No. 73) . .$1,150,000 

Repairs to school buildings 100,000 

Cleaning and sprinkling streets 350,000 

Lighting streets and public buildings 445,000 

Water for municipal purposes, hydrants 132,000 

Water for buildings 23,000 

"Urgent Necessities" 100,000 

Stationery, books and printing 44,000 

Advertising 35,ooo 

Printing public documents 11,000 

Rents, repairs and equipment of buildings 80,000 

Furniture for public buildings 9,000 

Premiums on official bonds 4,500 

Purchase of right of way 13,000 

Gasoline for city automobiles 3, 000 

Purchase of directories 600 

Purchase and repair of book typewriters 500 

Rebinding books 500 

The first three items in the foregoing list, aggregating more 
than three-fifths of the whole, are appropriated with the restrict- 
ing clause "to be expended by the Board of Public Works 


under the direction of the Board of Supervisors." The largest 
of the three (Budget Item No. 73) is discussed hereafter in 

The appropriation for "Urgent Necessities" is made pursuant 
to Section 8 of Article III, Chapter I of the Charter, and ex- 
penditures therefrom during the year must be approved by 
fifteen Supervisors and signed by the Mayor. A proper study 
of the year's needs and their systematic consideration at budget- 
making time would do away with the necessity of maintaining 
a large emergency account, as shown by the fact that many of 
the uses to which it is now put are "urgent necessities" by 
courtesy only, and should have been foreseen and provided for. 

The remaining centralized service appropriations are accounts 
that can be estimated fairly closely and even if they are not, 
they are so controlled during the year that there can be no 
objection to this method, providing, however, the departments 
receiving or using water, light, stationery, furniture or occupying 
rented buildings are charged with their proper share of the 
expenditures under these headings. 

Under the present system, the hospitals and institutions 
undertake to arrive at a "unit cost" of maintaining their inmates 
by dividing the number of inmate-days into an expense total 
that does not include such services as light, water and building 
repairs, or supplies, such as stationery, gasoline, etc. Obviously, 
the result is vague and misleading. It is likely that a more 
economical use of these services and supplies would be stimu- 
lated if the departments were charged with them. 


The following analysis and discussion of Item No. 73 in the 
1913-14 budget illustrates several of the weaknesses of the San 
Francisco budget system. 

The item reads as follows: 

"73. For paving, repaving, grading, constructing and 
repairs to streets, for construction of, reconstruction of 
and repairs to sewers, and for construction of and re- 
pairs to public buildings and other structures except 
school buildings, $1,150,000." 

In this single item there was provided a sum greater than the 
total annual expense of the City of Sacramento for all purposes. 
On the basis of this blanket estimate, a tax amounting to nearly 
22 cents on each $100 of assessed value was levied and collected, 
although it is difficult to understand how the Mayor, Board of 
Supervisors and the public could be expected to think and act 
intelligently on such a grouping of elements. (Note I.) 

Note 1.— The matter is partially explained by the fact that this partic- 
ular appropriation is not released automatically by the adoption of the 
budget, but is only provided as- a fund "to be spent by the Board of Public 
Works under the direction of the Board of Supervisors." This arrange- 
ment, while opposed to the spirit of the charter, gives the Supervisors, an 
elected body, control over the Board of Works, an appointed body. It 
possesses some advantages, depending largely upon the relative integrity 


This account is entirely at the disposal of the Board of 
Supervisors, by whom it is apportioned currently throughout the 
year, partly for specific purposes more or less closely related 
to the subject of the appropriation (as quoted above) and partly 
for the ordinary expenses of the three permanent bureaus of 
streets repairs, sewer repairs and public buildings. Apportion- 
ments to the three bureaus are made monthly, and in practice 
are contingent upon the promise of the bureau chiefs to do as 
the Supervisors direct. (See Note I.) A cypical regular monthly 
apportionment is as follows: 

For ordinary repairs to streets during July $60,000 

For ordinary repairs to sewers during July 12,000 

For repairs to Fire Department buildings during July.... 1,500 

For repairs to "general public buildings" during July 1,000 

For repairs to Police Department buildings during July... 500 

In addition to the regular work of the bureaus, the fund 
is used to meet unexpected demands for street and sewer work 
and for miscellaneous emergency building repairs during the 
year. Frequently streets on which the city owns property are 
improved, and the city's share of the expense is taken from 
Budget Item No. 73. To the extent that the money was pro- 
vided for emergency purposes of this kind, therefore, the 
ambiguity and absence of detail are unavoidable and permissible. 
The total expenditures of this kind that could not reasonably 
have been anticipated were under $50,000 in the fiscal year 

Still other applications of Budget Item No. 73 lead to the 
belief that this appropriation is a kind of a "jack-pot" or catch- 
all. For example, some of the uses to which it was put were 
as follows: 

For salaries in the storekeeping department, Board of 

Public Works $ 3,150 

For restoring records in Assessor's office 10,000 

For the restoration of surveys 44,000 

Providing block books for the Assessor 2,600 

Purchase of heaters for health office 108 

Purchase of equipment for building at Relief Home 1,000 

Purchase of pulmotor and oxygen helmets, emergency 

hospital 1,087 

Furnishing cottage at isolation hospital 450 

Etc., etc., etc 

and political independence of the Supervisors on the one hand, and the 
intelligence and efficiency of the Board of Works on the other. 

The situation is one of those typical examples of conflict between two 
authorities, where the one that controls the money works out a means of 
dictating to the other. The charter undertakes to remove administrative 
officers from political influence by making them appointive, but even 
appointive officers are powerless without money. The subversion of the 
charter intent noted here came about suddenly and unexpectedly a few 
years' ago. when a capable and non -political Board of Supervisors saw the 
need of controlling what they believed to be an inefficient Board of 
Works. Under the present arrangement, the Board of Supervisors, through 
its Finance, Streets and Public Buildings Committees, performs functions 
that are theoretically within the scope of the Board of Works. The situ- 
ation should be understood, although it does not affect the matter under 
discussion, namely, the need for more exact budget methods. 

These purposes are not even remotely connected with the 
title of the appropriation — "paving, repaying, etc., of streets, 
repairs to sewers, etc., and repairs to buildings . . ." They 
suggest with stronger emphasis the need of a proper, segregated 
budget, arranged in such detail that the public will know what 
is to be purchased or provided; the only exception being a single 
"Urgent Necessity" account, the size of which should be 
measured by the amount of the genuine "emergency" expendi- 
tures of the preceding year. 

Bureau of Street Repair Budget. 

As an example of the lax methods employed in the making 
and administration of the budget, a brief analysis is given here 
of the work of the Bureau of Street Repairs, which spends 
approximately $700,000 a year for labor, teams, materials, sup- 
plies, equipment, etc. 

First, this amount is not calculated on the basis of actual 
needs, which may be greater or less than $700,000, but it is 
estimated to be about what the city can afford to spend. 

Second, its expenditure is governed by an informal policy of 
the Board of Supervisors, which policy is not concerned primarily 
with the cost or the amount of work that should be done, but 
with the expediency of keeping a certain force of men and teams 
regularly employed. Accordingly, instead of adjusting the size 
of the force to the job, the job is adjusted to fit the size of 
the force. 

It is not desired to question the propriety of the absolute 
amount. The expenditure of $60,000 a month to maintain the 
streets of San Francisco in good repair may be proper and 
reasonable, provided the city gets full value for its money. 
Under certain definite conditions, there would be nothing in- 
herently wrong with the policy of keeping a fixed number of 
men and teams regularly employed, but in practice, the best 
interests of the taxpayers are subordinated to the policy. 

That this is true is proven by the repeated offers of private 
contractors to do street work more cheaply than the Bureau of 
Street Repairs can do it. When it is taken into consideration 
that the Charter requires city contractors to pay a minimum 
wage of $3.00 for an eight-hour day, these offers show that 
privileges have worked their way into the Street Repair Bureau. 
For example, all of the employes of this bureau, through the 
working of the "policy" described above, are given a Saturday 
half-holiday with pay each week. A "monopoly price" (from 50 
cents to $1.00 over the current market rate) is paid for teams, 
which also receive the Saturday half-holiday with pay. Deficient 
organization and lack of discipline eat up the balance of what 
would be the private contractor's profits — and more besides. 

Analysis and classification of the details included in the ex- 
pense of the Bureau of Street Repairs disclose the fact that this 
appropriation account was applied to the performance of several 
easily distinguishable functions, each susceptible of separate 


1. Overhead administration of bureau. (In addition to over- 
head salaries specified elsewhere in the budget.) 

2. Maintenance of corporation yards. 

Maintenance of bridges. 

Maintenance and operation of asphalt plant. 

Asphalt paving. 

Asphalt resurfacing. 

Basalt paving. 

Grading and curb-setting. 

Salaries and wages are paid out in connection with each of 
these functions, and in addition there are expenditures for sup- 
plies, materials and equipment used in the work of the bureau, 
such as asphalt, crushed rock, sand, fuel oil, curbing, shovels and 
picks, motor trucks, basalt blocks, etc., all of which could be 
allotted to the proper divisions or functions of the bureau, 
thereby making the determination of unit costs possible. 

Government Cost Accounting. 

In the various shops of the United States Government (as 
at Mare Island) strict cost accounting is required, because the 
Government has adopted the expedient of putting its shops on a 
competitive basis, allowing them the private manufacturer's 
profit as a differential. Such a practice might not be feasible 
in the street repair department of a city, but the need of cost 
accounting is in no way diminished by this fact. A department 
that is entrusted with the expenditure of a fixed sum, as is the 
Bureau of Street Repairs, should prove its efficiency by cur- 
rently reporting unit cost records for each of its several functions. 

Such records are possible — private contractors keep them of 
necessity, otherwise they would be unable to bid on city work. 
The need of cost records was shown in a meeting of the Board 
of Supervisors last July, when the Finance Committee was 
making one of its periodical efforts to cut the monthly appor- 
tionment of the Street Repair Bureau from $60,000 to $40,000, 
in order that the remaining $20,000 might be used for "contract 
work" at a considerable saving to the city. One of the members 
of the Board asked the chairman of the Finance Committee 
what the saving would amount to on asphalt paving. The reply 
was that the city had no records to show how much its work 
was costing. (Note 2.) 

A proper budget for the Street Repair Bureau would take 
into account in the first instance all those items of expense which 
can be definitely forecasted in advance, such as 

Note 2. — For several months prior to last July, it was the custom of the 
Bureau of Street Repairs to publish weekly in the Municipal Report a 
statement of its activities, consisting- of how much was spent for teams, 
how much for men, how much for the corporation yard, etc., but without 
any attempt to relate the expense to the amount of work done. Some one 
interested wrote to the Bureau, calling its attention to the fact that the 
record as published was worthless, and asking for unit costs. Since that 
time no statement of any kind has been published. 


(i) Overhead administration of bureau: 

(a) Salaries; 

(b) Supplies and transportation; 

(c) Necessary new equipment, such as tools, 

trucks, etc. 

(2) Maintenance of corporation yard: 

(a) Regular salaries and wages; 

(b) Estimated expense of maintaining the 

bureau's property. 

(3) Maintenance of bridges: 

(a) Regular wages; 

(b) Estimated expense of maintenance and 


(4) Maintenance of asphalt plant: 

(a) Regular wages; 

(b) Estimated expense of supplies, not mate- 


Having fixed upon these items of expense and provided for 
them specifically, the budget-makers would properly decide upon 
how much, in their judgment, the city could afford to spend for 
street repairs during the coming year; that is, how much for 
wages, teams and materials, the variable elements in the ex- 
pense of the bureau that would form the basis for cost ac- 

Check on Extravagance. 

It would not be necessary to estimate in advance, as in some 
cities, how many yards of each kind of paving, etc., should be 
provided for. Cost accounting would serve as a check upon 
extravagance, for if the bureau's unit costs were very much 
higher than the bids of reputable contractors for the same work, 
public opinion would soon be effective in enforcing economy. 

An example of the defective and incomplete salary itemiza- 
tion that is common in the budget is illustrated by the pay roll 
of the Street Repair Bureau. On page 9 of the printed budget 
there are the following items under the heading of Street Repair: 

322. 1 Superintendent $3,000 

323. 1 Assistant superintendent 2,400 

324. 1 Clerk 1,500 

325. 1 Stenographer 1,500 

326. 6 Engineers on bridges, at $1,560 9,360 

327. 7 Watchmen-bridge tenders, at $1,080 7,560 

Paid from the blanket appropriation for street repairs, and 
not specified in the budget, are the following regular positions 
in the bureau: 

2 Assistant superintendents, at $1,800 $3,600 

1 Team foreman 1,800 

1 Superintendent stone paving 2,100 

1 Foreman paver 2, 100 

1 Experienced clerk 1,500 

Steam roller engineers, blacksmiths, carpenters, watch- 
men, etc., etc. 


Why one assistant superintendent should be "in" the budget 
and two should not; why one clerk is "in" and one is "out;" 
why the team foreman and superintendent of stone paving 
should be "out" instead of "in" when all of these positions are 
permanent are questions which defy explanation. 

Bureau of Sewer Cleaning and Repairs. 

The Bureau of Sewer Cleaning and Repairs spends approxi- 
mately $150,000 annually, which is apportioned monthly from the 
same blanket budget item as apportionments are made to the 
Bureau of Street Repair. Virtually the same conditions surround 
the apportionments, and the money is spent in the same way. 
There is no reason why the expense of this bureau should not 
be estimated for a year in advance, on a classification which 
would include separately the items of general overhead adminis- 
tration, cleaning of catchbasins, flushing sewers, and repairs, 
with the proper apportionment of labor, materials and equip- 
ment to each item. 

Bureau of Building Repairs and Maintenance. 

A sweeping reorganization of accounts in the Bureau of 
Building Repairs and Maintenance would be necessary before 
even a beginning could be made in the installation of exact 
budget methods. 

It is the function of this bureau to supervise the janitorial 
and elevator service in municipal buildings, and to do all of the 
building repair work for the Department of Education, the Fire 
Department, Police Department, Health Department, Hall of 
Justice, City Hall and all other city buildings except those 
under the jurisdiction of the Park Commission. 

Each month an apportionment is made from the blanket 
budget item under the following headings: 

"For repairs to Fire Department buildings during July ... .$1,500 
For repairs to Police Department buildings during July.... 500 

For repairs to general city buildings during July 1,000" 

(A separate budget item provides the money for current re- 
pairs to school buildings.) 

From time to time special apportionments are made from the 
blanket streets, sewers and buildings item for specified jobs 
when it appears that the regular monthly apportionments will 
not be sufficient. Thus, for example, during the fiscal year 
1913-14 special apportionments aggregating $14,405 were made 
for such building repair work as painting Relief Home, $6,000; 
wiring Hall of Records, $830; repairs to jails, $2,000; construc- 
tion of cottage at Isolation Hospital, $2,800; etc., etc. 

In addition, building repairs frequently are paid for from the 
maintenance accounts of the various city institutions, such as 
the Tuberculosis Hospital, Isolation Hospital, etc. No rule 
determines definitely what budget accounts should be charged 
with the expense. Managers and superintendents of the institu- 


tions try, of course, to have their repair work charged to the 
Repair Bureau's accounts, but failing in this, they usually arrange 
to pay the workmen out of the money appropriated to their 
institutions under the heading of "maintenance." 

The natural result is a bookkeeping tangle that makes a 
systematic record of repair and maintenance costs impossible, 
and at the same time prevents the making of accurate estimates 
for budget purposes. As in the Bureau of Street Repair, the 
tendency is to fit the job to the regular force of the bureau, 
rather than fit the force to the jobs, as a private industry 
would do. 

System Makes for Inefficiency. 

The system of charging building repairs (except in a com- 
paratively few instances) to a blanket account, instead of 
charging them against the accounts of the several departments 
which, by the nature of their responsibilities, the departmental 
managers are interested in conserving, is wrong in theory and 
expensive in practice. Some marked illustrations of the truth 
of this statement are available, and are given here to show the 
primary fault of the system: 

i. Some months ago a "solarium" was needed at the Tuber- 
culosis Hospital and following the usual procedure the Board 
of Public Works was asked to make an estimate of the cost. At 
the same time a private contractor was asked by the superin- 
tendent of the hospital to make a bid. The two estimates com- 
pared as follows: 

Board of Public Works $135 

Contractor 75 

In order for the city to have taken advantage of the lower bid 
the superintendent would have to pay for the work out of his 
maintenance appropriation (after first getting permission), but 
in this case arrangements were made to charge the work to the 
"blanket account" of the Building Repair Bureau, and the 
superintendent's personal interest in the outside bid was at an 
end. The Repair Bureau did the job. 

2. A few weeks later there were two small jobs at the same 
hospital and in the same manner the Board of Works and out- 
side bidders were asked to submit estimates. One of the jobs, 
described in Board of Health Requisition No. 970 as "placing 
a canopy over gas-plate in officers' dining room; placing 18-inch 
ventilator in officers' dining room; placing 8-inch ventilator over 
icebox," was estimated as follows: 

Board of Public Works $65.00 

C. Brown & Sons 35-00 

Cook & Co 22.50 

The second job, described in Requisition No. 971 as "installing 
four 3-light clusters with pendant switch in officers' dining room; 


one 4-light cluster and switch in internes' room, and cap over 
outlet," was estimated as follows: 

Board of Public Works $45 

Levy Electric Company 26 

This time the Bureau of Building Repairs reported that its funds 
were low and that if it did the work, it must be at the expense 
of the hospital maintenance account. Here the personal interest 
of the superintendent in conserving the funds at his disposal was 
touched, where it had not been in the construction of the "sola- 
rium." He made formal application to the Finance Committee 
to be allowed to have the work done outside, which was granted, 
and the city saved the difference between $48.50 and $110. 

3. A larger job — the reconstruction of the superintendent's 
residence at the Isolation Hospital — illustrates the same principle 
and also indicates the efficiency of the Building Repair Bureau. 

This residence, or "cottage," was completed December 9, 
1913, by private contract at a total cost of $3,899. Two weeks 
later the building was partly destroyed by fire. (Note 3.) Messrs. 
Walker and Baker, of the City Architect's office, with Consulting 
Architect Reid, surveyed the damaged building and made what 
they declared in their report was a liberal estimate of the cost 
of restoring it to its original condition. 

Their estimate was $2,178. 

The estimate of the Repair Bureau was $2,800. 

The Supervisors appropriated $2,800 and the Building Repair 
Bureau did the work, spending exactly $2,805.43. 

One of the items of the reconstruction was the building of a 
fireplace and chimney. An outside contractor, who had built a 
similar fireplace and chimney, offered to do the job for $175. 
It cost the Building Repair Bureau $295.68. 

The architects' estimate of the cost of lumber, millwork and 
removing the burned portions, including labor, was $865. The 
Repair Bureau brought the actual cost to $1,270.42. The archi- 
tects' estimate on painting was $375. This item cost the Repair 
Bureau $508.18. 

The specifications on which the Building Repair Bureau based 
its estimate called for complete restoration. An examination 
made in May, after all of the appropriation had been spent, dis- 
closed the fact that none of the doors fit their frames, several 
of the doors would not close at all, the windows would not remain 
closed unless they were locked and they could be locked only with 
great difficulty. 

The wiring for the telephone in the superintendent's bedroom 
was carried inside the wall and there forgotten until the room 
was plastered. In an attempt to locate the wire, several holes 

Note 3. — The official report of Battalion Chief Charles Murphy of Dis- 
trict 4 stated that the fire started under the hearth, where an iron plate 
on which the 'brick rested had been laid in direct contact with a double 
wooden floor in violation of Section 246 of Building Ordinance 1008. The 
cottage had been built under the surveillance of an inspector of the 
Board of Works. 


were drilled in the plaster, but finally the search was abandoned 
and new wiring was carried in on the outer surface of the wall. 
The holes in the plaster were covered with stitcky flypaper. 
Flypaper was also used in the hall to cover holes made by a 
careless workman. 

Although the specifications included cleaning up the rubbish 
after the job had been completed, extra help had to be hired 
for this work and paid from the hospital maintenance account. 

The superintendent of the hospital, explaining the diligence 
of the Board of Works employes who constructed the cottage, 

"They came to work when it suited them and quit 
when they pleased." 

A Remedy in the Budget. 

As long as money for building repairs is apportioned as at 
present conditions of inefficiency similar to those described must 
almost certainly follow. These conditions can be corrected, how- 
ever, by revising the budget in such a way as 

(a) to eliminate "blanket" appropriations; and 

(b) to provide for each institution or building a sepa- 

rate repair appropriation based on an exact esti- 
mate of needs. 

The Bureau of Building Repairs could be retained, but there 
would be established between it and the departments the rela- 
tionship of employee to employer. In effect, the departmental 
managers would hire the Repair Bureau to do their work, and 
if they were made to pay more than private contractors charged, 
the Bureau would quickly be abolished. Its one excuse for 
existence would lie in its ability to do the work more cheaply 
than it could be done outside. 

Miscellaneous Apportionments. 

In a proper budget the numerous "miscellaneous" apportion- 
ments out of Blanket Item No. 73 would be provided for 
specifically in their proper place. Sound budget methods cut 
the unknown quantity called "miscellaneous" to a minimum, 
because when officials undertake to plan their work intelligently 
their needs take concrete form. 

This item (No. 73) should be broken up into its constituent 
elements and these elements classified in such a way as to make 
the budget useful for administrative purposes and understandable 
to the public. 


This group is made up of specific appropriations outside of 
the regular routine and controlled only by the Supervisors, con- 
sisting principally of special improvement funds, which, if not 
spent in the fiscal year in which they are provided, are carried 
over with the liability (i. e., the appropriation) still against them. 


This itemization is commendable, but like the itemization in 
Class "E," it is incomplete and misleading. Apparently the 
Finance Committee would prefer to appropriate a lump sum for 
such work, for in its budget report for the present fiscal year, 
dated April 27, 1914, it writes (page 5): "Last year the Commit- 
tee recommended that improvements of this character (special 
street work) be not specially itemized in the budget, but that the 
work be done. Upon the recommendation of the other commit- 
tees of the Board the Finance Committee will always endeavor to 
find appropriations for work of this character." 

In underlining the final clause in the quotation, there is no 
intended reflection upon the present able and honest Finance 
Committee, but rather a desire to emphasize a fact which must 
have escaped them, namely, that a system which permits one 
finance committee to "find" appropriations would be an easy 
means to questionable ends with a less able and conscientious 
committee in charge of the city's money. 

Without itemization, the budget affords no way for the 
Supervisors, the Mayor or the public to measure intelligently 
the proposed expenditures. 

The list of Class "G" appropriations follows: 

Ten street improvement "special funds" $199,500 

Extension Municipal Water Works special fund.. 15,000 

Convenience stations special fund 15,000 

Furniture new City Hall special fund 50,000 

Construction new Fire Department buildings 95,ooo 

Potrero Emergency Hospital and equipment.... 18,000 

Central Fire Alarm Station and equipment 75,ooo 

Legal expenses, condemnation Spring Valley 50,000 

Widber deficiency 6,964 


In a private business, all of these expenditures are on the 
"capital account," except the Widber deficiency, which would be 
charged to "profit and loss." For some years a defalcation has 
been carried on the Treasurer's books as a deficit, and the money 
is here appropriated to balance the books. 

The Board of Supervisors controls the appropriation for new 
fire houses as a check upon the Board of Fire Commissioners. 
Under the Charter (Article IX, Chapter I, Section 5) the Fire 
Commission is authorized to "organize the department, create 
and establish such fire companies as it may deem necessary" 
and "exercise full power and authority over all appropriations 
made for the use of the department." By controlling the appro- 
priation for new houses, the Board of Supervisors exercises a 
certain measure of authority not given it under the Charter. 
(See in this report discussion of relationship between Super- 
visors and administrative boards.) 

The appropriation for new fire houses should be itemized in 
the budget, showing where they are to be established and per- 
mitting public discussion of the question. 


Certain appropriations in the budget required by law to be 
made are grouped together here, as follows: 

Amount Specified in Charter: 

"Special Election Fund" $ 50,000 

Civil Service Commission, expenses and inspection 17,500 

Police Chief's contingent fund 8,000 

Mayor's contingent expenses 3,600 

Relief to exempt firemen 5,000 

Public celebrations 3,000 

$ 87,100 

Legally Required, Exact Amount not Specified. 

Stenographers, Superior Courts $20,000 

Interpreters, Superior Courts 9,600 

Jury and witness fees 27,000 

Jury expenses 1,500 

Grand jury expenses 3,000 

Court orders 12,000 

Examination of insane persons 8,000 

Printing law and motion calendar 5, 000 

Auditor, extra clerks, extending assessment roll.. 5,000 

Assessor, extra clerks 46,000 

Assessor, poll tax collectors 5,000 

Stationery for the Assessor 5, 500 

Recorder, copyists (paid by piece work) 44,000 

Tax Collector, extra clerks 18,720 

Printing delinquent tax list 2,000 

License tags 2,000 

Maintenance of minors 200,000 

Maintenance inmates, state institutions 49,000 

"City and County good roads fund" 500 


Miscellaneous Routine Appropriations: 

"Special Emergency Sanitary Measures" $ 15,000 

Municipal Band for outdoor concerts 10,000 

Maintenance public pound 12,000 

Investigation of public utilities 10,000 

Interment United States soldiers and sailors 2,500 

Burial of indigent dead 4,000 

Publishing of municipal reports 5.000 

$ 58,500 

Grand total $609,420 

Special Election Fund. 

Of the appropriations required to be made in specified 
amounts, all are regularly consumed except the "Special Election 
Fund," which is an emergency fund required to be maintained 
by the Charter (Article XI, Chapter III, Section 14), which reads: 

6 4 

Section 14. In the first annual budget to be adopted 
hereafter, by the Board of Supervisors, said Board shall 
appropriate not less than fifty thousand dollars to be 
known as the special election fund, to be used exclusively 
for defraying the cost of verifying petitions and other 
expenses of special elections initiated by petition of the 
electorate, including recall elections. In the event of the 
expenditure of any of said fund, the Board of Supervisors 
in the next succeeding annual budget shall appropriate 
a sum sufficient to replete said Special Election Fund. 
(Added by amendment November 15, 1910.) 

Evidently it was intended to create a permanent, or "con- 
tinuing fund," which would be a drain upon the taxpayers only 
when special elections were called. It has been the practice of 
the Supervisors, however, to use the unexpended balance at the 
end of each year for other purposes and instead of appropriat- 
ing enough to replete the fund, they appropriate an additional 

Thus, in the fiscal year 1912-13 (the first after the above pro- 
vision went into effect) there was provided a special election 
fund of $50,000, of which $43,218 was spent, leaving a balance of 
$6,782, which was re-appropriated for other purposes. In the 
budget for the fiscal year 1913-14 a new appropriation of 
$50,000 was made, none of which was spent. Under the Charter, 
it should have retained its identity as the "Special Election 
Fund" and reduced by that amount (or approximately one cent 
on the tax rate) the taxes of the present fiscal year. It went 
into other projects, however, and the 1914-15 budget raised and 
appropriated still another $50,000 for possible special elections. 

The appropriation for extra clerks legally required to be 
made to the Assessor, Tax Collector, Auditor and Recorder, 
should be subject to the same kind of study as has been sug- 
gested for these offices under Class "D," namely, effort should 
be made to relate the amount of work to the salary expense. 

Most of the other appropriations in this group must be esti- 
mated under difficult conditions and whether they show a surplus 
or deficit, no blame can attach to the budget-making body that 
uses reasonable judgment. Thus, grand jury expenses may mount 
up to double the appropriation, and so with the expense of ex- 
amining insane persons, etc. 


The inevitable result of loose budget methods will be either 
a surplus or a deficit at the end of the fiscal year, and as deficits 
are unpopular, it has been the practice for some years to plan in 
advance for the creation of a surplus of from $150,000 to $400,000 
in order that any mistakes of the year may be covered and there 
may be left a comfortable balance to be spent according to the 
judgment of the Finance Committee without being called to the 
public attention through the budget. 

But for this practice, strict accounting methods would have 

6 5 

been installed long ago, to put public business on a business- 
like basis. 

The surplus is created in three ways: (a) by over-estimating 
the amounts required to be raised by taxation; (b) by under- 
estimating the assessment roll, and (c) by under-estimating the 
receipts from sources other than taxation. 

Thus, in the fiscal year 1912-13, the estimate of the assess- 
ment roll was made so low when the tax rate was fixed that 
there was produced here a surplus collection of $122,200. Mis- 
cellaneous receipts exceeded the estimate by $60,000, and there 
were free surpluses in the appropriation accounts amounting to 
$152,000, bringing the total surplus to approximately $335,000. 
If this had been applied to the reduction of taxes, it would have 
saved the taxpayers more than six cents on each $100 assessed 
value. Instead, the sum of $30,000 only was applied to the reduc- 
tion of taxes, most of the remainder being spent for miscellaneous 
purposes during the fiscal year 1913-14 except approximately 
$90,000 paid out in judgments against the city, and $65,000 which 
went to swell the available surplus in June, 1914. 

Meantime, the budget for the fiscal year 1913-14 had been 
made and the tax rate fixed, again on an under-estimated assess- 
ment roll, which ultimately yielded approximately $10,000 more 
than the estimate. The receipts from other sources were ap- 
proximately $15,000 more than had been officially counted on, 
and at the end of the year the surplus items in the budget 
exceeded the deficits by $235,000. During the year two bond 
elections had carried and it was held that the general fund 
should be reimbursed from the sale of these bonds for the ex- 
pense of the elections, which added $65,500 more. Expenditures 
amounting to $21,000 made from the general fund in behalf of 
the Twin Peaks tunnel project were returned when the assess- 
ments were collected, going to swell the surplus further. In all, 
there was available as surplus at the close of the fiscal year 
1913-14 a sum close to $400,000. 

Had this balance been applied to the reduction of taxes, it 
would have lowered the rate for the current year by 7 cents on 
each $100 valuation. Instead, however, the Finance Committee 
applied $16,000 only to this purpose and the Board reappropriated 
the balance, the first batch of extra-budget appropriations from 
surplus being as follows: 

Completion Polytechnic High School $165,000 

Machinery for Municipal Asphalt plant 32,000 

Repairs to Fourth street bridge 50,000 

Building Repair Department, new shop 20,000 

Motor trucks, Street Repair Bureau 11,000 

Paving bricks for Third street 1 1,320 

Repairs to Isolation Hospital 5>ooo 

Miscellaneous purposes 20,000 

These are examples of "finding" appropriations. It is not 
contended that any of this money was diverted to an improper 


purpose, but that when it is used in this manner it escapes the 
attention that the public bestows upon budgetary appropriations, 
and therefore is liable to misuse. 

Surplus Fund and Purposes for Which It May Be Used. 

It is questionable whether this application of surplus is not 
a violation of the Charter, which reads (Article III, Chapter II, 
Section 3): 

Section 3. The Surplus Fund shall consist of the 
moneys remaining at the end of any fiscal year in any 
other funds (than the library, school, park, etc., special 
funds) after all valid demands, indebtedness and liabilities 
against such funds incurred within such fiscal year have 
been paid and discharged; provided, that all disputed or 
contested claims payable out of such funds have been 
finally adjudicated. 

The Surplus Fund shall be used for the following pur- 
poses and in the order following: 

1. In payment of any final judgment against the 
City and County. 

2. In liquidation and extinguishment, under such 
regulations as the Supervisors may adopt, of any out- 
standing funded debt of the City and County. 

3. To be carried over and apportioned among the 
funds and used in the ensuing fiscal year as part of the 
income and revenue thereof. 

It is plain that the reappropriation of surplus moneys for 
purposes indicated in the list given above is not in conformity 
with the Charter requirement, and it is further evident that the 
framers of the Charter sought to prohibit the practice which is 
being followed. 

If proper budget methods were in force, the question would 
not arise, inasmuch as there would be no need to create an over- 
whelming surplus. All appropriations would have to appear in 
the budget, as they should appear, even under the present 
system. A less able Finance Committee (always a possibility in 
politics) might make costly mistakes in its application of 
hundreds of thousands of the taxpayers' money. 


The installation of right budget methods is a task for experts. 

There have been set down here a more or less complete 
summary of the faults of the San Francisco budget with a few 
illustrations of what they cost in dollars and cents. 

No question is made of the absolute judgment of the Finance 
Committee, which has to base its opinions on the facts and 
reports that are at hand. Not the opinions of the Finance Com- 
mittee, but the foundations for them, are at fault. These should 
be corrected. 

San Francisco could well afford to pay the best budget experts 
in the United States to install a proper system. 



No argument should be necessary that the city government 
should be equipped with an accounting system that will show 
accurately and promptly the costs of each organization, unit and 
functional activity for stated periods of time. No progressive 
private enterprise can afford to be without such a system. 

Right management depends on right accounting. 

Right budget-making depends on right accounting. 

FACTS, the product of right accounting, when available for 
administrative guidance, take the place of rule o' thumb methods. 

An elaborate study of the accounting system in force in the 
city government was made four years ago and submitted to the 
Mayor by four certified public accountants acting for the Mer- 
chants Association (now the Chamber of Commerce). 

The faults and weaknesses of the system were pointed out 
and constructive suggestions were made. 

No changes have been forthcoming. The faults and weak- 
nesses still exist, together with the expensive, cumbersome 
duplication of service everywhere apparent. 



A thorough examination into the methods of purchasing sup- 
plies and materials for the city resulted in the recommendation of 
the following changes, reasons for which are contained in the dis- 
cussion below: 

Changes Requiring Charter Amendment. 

1. The wording of that part of Section i of Chapter II 

of Article II of the Charter, relating to the estab- 
lishment of a bureau of supplies, should be 
changed to make carrying out of provisions 

2. Purchasing agent should do all purchasing for all 

departments of municipal government. 

3. The Charter provision requiring each bid to be con- 

sidered separately ("The award as to each article 
shall in all cases be made to the lowest bidder 
for such article. "Art. II, Sec. 1, Chap. Ill) should 
be amended to permit combining in one contract 
a number of articles of the same trade classifica- 

Under the present law a merchant may be low bidder upon 
one article the profit on which would not pay interest on his 
certified check. The time for making contracts, the form of 
specifications, and the term of contracts should be left to the 
judgment of the purchasing agent. 

Changes Not Requiring Charter Amendment. 

1. Establishment of Central Purchasing Bureau. 

2. Establishment of Central Supply Depot. 

3. Delivery of all supplies, except perishables, at Cen- 

tral Depot. 

4. Maintenance of adequate inspection service, independ- 

ent of Purchasing Bureau and reporting directly 
to the Auditor. 

5. Substitution, at bidder's option, of surety bond for 

certified check or certificate of deposit. 

6. Simplification of payment procedure: 

(a) Personal attendance at City Hall of merchant 

or representative should not be necessary. 

(b) Bills should be paid by check and through 

the mail instead of in coin at the City 
Treasury as at present. 

(c) Settlements could be expedited to enable city 

to take advantage of all trade discounts 
for cash payments. 

7. Establishment of central accounting control over all 


8. Competitive bids for city teaming business. 


9. Investigation of present teaming costs and teaming 
requirements with a view to substituting city- 
owned motor vehicles for hired teams. 

The Board of Supervisors, in December, 1912, through the 
addition of four new subdivisions to Section 1 of Chapter II of 
Article II of the Charter, was authorized: 

1. To provide for and regulate the purchase, storage and 

distribution of all supplies for the various offices 
and departments, to provide for the establishment 
of a Bureau of Supplies and to employ such help 
as was necessary. 

2. To prescribe the forms in which demands against the 

Treasury shall be made and presented, and the 
forms in which warrants shall be drawn by the 
Auditor and delivered for the payment thereof. 

3. To prescribe a uniform system of accounting for the 

various offices and departments. 

4. To prescribe forms, methods and facilities for keep- 

ing the records, documents and files of any office 
or department of the City and County, unless 
otherwise provided by general laws. 

Not Mandatory. 

The Charter provision, however, was not made mandatory. 
The Board has neglected to exercise in full the authority given 
to it, and, inasmuch as the efficient administration of any one, 
depends to a great extent upon the adoption of all the others, 
the additions to the Charter have not yielded the benefit there 
was a right to expect of them. 

It was the intention of the designers of these amendments 
that the injunction to carry out their terms should be mandatory. 
Supervisor Koshland is on record as "insisting" upon the original 
wording being retained. The change from "must" to "may" was 
made by the Judiciary Committee of the Supervisors, and as 
"may" the amendment was submitted and adopted. 

What Amendments Would Have Given. 

By carrying out the provisions of the amendment, as there is 
no reason to doubt it was the desire of the people that they 
should, the Board of Supervisors would have given San Francisco: 

1. A Central Purchasing Agency. 

2. A Central Supply Depot. 

3. A simplification of business methods which would 

have made the city a more desirable customer. 

4. A system of accounting which would have supplied 

necessary information which is not now available. 

Conditions as They Are. 

The Bureau of Supplies was established and placed in charge 
of a competent chief. A considerable improvement in the city's 
methods of purchasing has resulted from the organization of 
the bureau. 


Suggestions for simplifying the procedure in the city's dealings 
with merchants have not been carried out, and, as a result a 
large number of local dealers have taken the view that they 
cannot afford to bid on city business, on the ground that the 
time wasted in complying with the conditions imposed more than 
offsets any profits there may be in a sale. 

This reduces the number of bidders and by shutting out a 
large, and, in many cases, the most desirable, part of the field, 
the city is exposed to the machinations of the contractors' ring — 
a negligible evil in a wide field. 

The absence of a proper system of accounting makes it im- 
possible for the city to get the full advantage of its undoubted 
solvency and large purchasing power. 

A purchasing agent, possessed of definite knowledge as to the 
quantity of a certain supply needed can secure better terms than 
when his knowledge of needs is based on the sum of a large 
number of more or less vague approximations. 

A proper system of accounting would yield this information. 

What the present system is worth may be judged by the 
statement attributed to the city's expert accountant that to 
answer the question: "How much gasoline did the city use last 
year?" would entail an expense of thousands of dollars and that 
even then the correctness of the answer would be more or less 
in doubt. 

Step in Right Direction. 

The resolution adopted by the Supervisors requiring each 
department to furnish, twice a year, a statement showing the 
exact quantity of each kind of supplies purchased during the 
six months preceding, is a step in the right direction. In the 
absence of central accounting control over supplies, however, 
the "exactness" of these returns, and, consequently, their ad- 
ministrative value, will be open to question. 

What Supply Department Now Does. 

The chief of the Bureau of Supplies prepares the specifica- 
tions on which the city bases its contracts for supplies, and, 
when the contracts have been awarded, furnishes each depart- 
ment with a schedule showing the dealers from whom supplies 
are to be ordered and the prices at which they should be billed. 

Theoretically, he also makes all non-contract purchases and 
exercises supervision, by inspection, over all deliveries. 

In fact, non-contract purchases are made by the departments 
needing the supplies and there is no independent inspection of 
deliveries. If the receiving employe is incompetent or in- 
different, the city must depend upon the honesty of the merchant. 

Value of Inspection. 

As to the value of this the testimony of the commissary of 
the City Prison is of interest. The commissary has held his 

position for many years. His integrity and his knowledge of 
the supplies he handles are beyond question. 

Practically every contractor, he says, with whom he has 
dealt during his long experience, has, in his initial deliveries, 
made a test of the vigilance of the city's check either by deliver- 
ing underweight or substituting a brand or quality other than 
specified in the contract. If the shortage or substitution is 
detected and the receiving officer makes it plain that he knows 
what he is ordering and will insist upon compliance with contract 
specifications and on full measure, the contractor, in future de- 
liveries usually plays fair. 

"All contractors are honest," declares this officer, "when they 
know you're watching them." 

Non-Contract Purchases. 

Non-contract purchases constitute a steadily decreasing per- 
centage of the city's buying. The greater part of the non- 
contract expenditure is for repairs, which, in their nature, are 
not always subject to contract provision. 

All non-contract purchases must be approved by the chief of 
the Bureau of Supplies. 

In some cases he bases his approval on the strength of a 
notation on the requisition to the effect that the employe order- 
ing the goods has secured several bids, the amounts of which 
are given and the lowest of which was awarded the business. 

In other cases proposals for non-contract expenditures are 
submitted by the chief of the Bureau of Supplies to the Supplies 
Committee of the Supervisors and he bases his approval or 
otherwise on the committee's decision. The chief of the bureau 
maintains no price register or vendor register, as a purchasing 
agent should. 

There is no rule governing the procedure and each case of 
non-contract purchase is acted on separately. 

Departments That Do Their Own Purchasing. 

The Department of Supplies has no jurisdiction over the 
purchasing for the Park, School, Playground, Library, Law 
Library and Election Departments. 

Each of these departments makes its own contracts and does 
all purchasing, contract or otherwise. Purchasing for these 
departments could be handled more efficiently and with greater 
economy through a central bureau. 

Purchases on contracts made by these excepted departments 
may not be participated in by the city as a whole nor by any 
department other than the one making the contract. Any depart- 
ment, including those excepted from the Supply Bureau's super- 
vision, may purchase under any of the city general contracts. 

Teaming Contracts not Competitive. 

Although the Charter, expressly and by implication, forbids 
purchasing except under conditions of open competition — the 


lowest bidder to get the business — this rule is not observed in 
all cases. 

In the purchase of teaming service, for instance, no bids are 
invited, and as a consequence, the city is paying annually for the 
hire of teams an amount considerably in excess of the ruling 
rates. This works a double hardship on the taxpayers. 

1. It costs the city more to hire a team — although it 

hires and has use for hundreds of them — than any 
private citizen, hiring a team at ruling rates, 
would be asked to pay. 

2. It bars the way to substantial economies. The in- 

fluence which permits the present rate of over- 
payment is strong enough to prevent the purchase 
of motor vehicles, with which, there is every rea- 
son to believe, the city could do its own work bet- 
ter and at considerably lower cost. 

The Sheriff is permitted to place with whom he wills and with- 
out competitive bids, the horse-shoeing business of the County 
Jail. This business amounts to more than $600 a year. 

It is not necessary, however, that there should be more than 
one or two horses at the County Jail. Substituting motor 
vehicles for horses would add to the efficiency and economy of 
the jail administration. 

Suggestion for Simplification not Adopted. 

One of the suggestions made for the simplification of the 
city's business was to do away with the requirement for con- 
tractors to swear to the correctness of their demands and sub- 
stitute the simple declaration that the goods were furnished, 
that the amount is correct and that it has not been paid, as is 
the practice of the United States Government. 

The procedure of "swearing to the correctness" of a claim 
requires the merchant or his representative to take the demand 
to the office of the Board of Supervisors and there take a formal 
oath. This means inconvenience for the merchant and consider- 
able confusion at the counter of the Supervisors' office — both un- 

City Should be Best Customer. 

The municipality should be the best customer in the city — 
but is not so regarded. 

Many of the large wholesale houses refuse to bid on city 
contracts for the reason that their customers, the retail mer- 
chants, are able, under the present system of purchasing, to 
secure this business. 

Other merchants refuse to bid on account of the trouble 
involved in doing business with the city — such as the necessity 
for going, or sending a clerk, to the City Hall to swear to the 
correctness of each demand. 

Others will not bid because of the city's requirement that 


bids be accompanied by certificate of deposit or certified check. 
In many cases, they say, the expense of securing this check or 
certificate — they must pay interest on it at the rate of 7 per cent 
—exceeds the profit on the contract. This might be the case, 
for instance, where a bidder on several articles was low on only 
one article of which the city used very little. Bidders would be 
willing to file a bond. 

Another objection registered against city business is that it 
takes sometimes 45 days and longer to collect for goods de- 

One more objection is that the city, instead of paying by 
check and through the mail, discharges its obligations at the 
city treasury and in gold coin. This consumes more time and 
involves with collection a needless risk. 

Advantages of Central Purchasing Agency. 

The establishment of a Central Purchasing Agency, and, in 
connection therewith, of a Central Supply Depot where all pur- 
chases except, perhaps, perishable subsistence supplies, could be 
delivered, would: 

1. Make the city's business more attractive to whole- 

salers in that deliveries could be made in larger 

2. Make possible the independent inspection of all de- 


(The goods are now delivered at the respective 
institutions. The samples with which many of them 
should be compared at the time of delivery are kept 
at the City Hall.) 

3. Simplify the establishment of a system of accounting 

control over stores and put an end to the prac- 
tice now practically universal throughout the city 
service of expending the surplus of the appropria- 
tion for a given period for supplies to be used at 
some future time. 

4. Reduce the expense of delivery. 

A simplification of the present system of auditing demands 
would make the city's business more attractive to the merchant 
and would enable the city to take advantage of the trade dis- 
counts available to cash customers. 

One-Twelfth Requirement. 

At first glance it might seem that the one-twelfth limit 
would operate to curtail the buying capacity of the Central 
Purchasing Bureau and that a Charter amendment would be 
necessary to give the Purchasing Bureau the free hand essential 
to efficiency. 

This difficulty could be overcome by treating supplies pur- 
chased but not issued as expendable assets. This is what they are. 

With a properly administered Central Purchasing Bureau, 
however; with central accounting control over all supplies; with 


stores accounts which would make possible a computation of true 
operating costs and the establishment of definite standards, the 
necessity for the one-twelfth rule would cease to exist. The one- 
twelfth rule is necessary as a physical limit on misuse and ex- 
travagance only because the present methods of purchase and 
accounting afford no check. Proper accounting would substi- 
tute intelligent central control for the present arbitrary and 
inadequate limitation. 

Sale of Old Material. 

Another advantage in the establishment of a bureau for the 
purchase and control of supplies would be that the bureau would 
be able to exercise supervision over the disposition of old mate- 
rial and personal property no longer needed. 

The Charter empowers the Supervisors to provide for the 
sale at public auction, after advertising for five days, of personal 
property unfit or unnecessary for use. The Supervisors have 
relinquished this duty to the Mayor. 

It is a duty that could be performed more efficiently by the 
Central Purchasing Bureau. 

Regardless, however, of the department or official to whom 
this duty is intrusted, provision should be made for the inspection 
of the property to be sold and a definite procedure established. 

No property should be recommended for disposal except when 
the recommendation is accompanied by a certified report as to its 
condition, the reason for its unservicability and its estimated 
sale value. 

Before the sale the findings of the inspector should be ap- 
proved by the Auditor and both Auditor and Treasurer should be 
furnished with full details of each sale. 




Suggested Changes Requiring Charter Amendment. 

i. Civil Service Commission should be more independent, fi- 
nancially, of the Board of Supervisors and absolutely independent 
of the possibility of coercion by the City Administration. (Note I.) 

2. The experience of other Cities shows that the Municipal 
Civil Service Commission should be under State control or super- 
vision to remove it as far as possible from local political in- 

3. Section 10 of Article 13 of the Charter should be amended to 
read: "The Commissioners must (instead of may) strike off 
names of candidates from the register (eligible list) after they 
have remained thereon more than two years. 

Changes Which Would Not Require Charter Revision. 

1. The establishment of time and work records throughout 
the Municipal Service. 

2. The grading of salaries according to duties and responsi- 
bilities so that there would be uniformity throughout the service. 
The establishment in each class of a minimum salary at which all 
new appointees or employes promoted from class below, would 

3. The regulation of salary increases according to length of 
service and quality of work. The establishment of a rule whereby 
work below the standard necessary to justify a salary increase 
after a stipulated time would automatically detach the employe 
from municipal service. 

4. Promotion from class to class to be governed by examina- 
tion with allowance for experience based on efficiency record. 

5. The preparation of charts showing lines of possible pro- 
motion throughout the service. 

6. The Civil Service Commission, under Section 14 of Article 
XIII of the Charter, is given full authority to investigate the 
organization and business methods of the various offices in the 
City Government. If this work is hampered by lack of appro- 
priation or any other cause the facts could be given publicity. 

7. The re-establishment of the Municipal Efficiency Bureau. 

8. Prohibition of successive temporary appointments. 

9. Insistence that requests for permission to make so called 
"temporary" appointments be accompanied by evidence to show 

Note 1. — The twofold purpose of Civil Service is: 

(a) To restrain appointing officers from using administrative positions 
as political spoils. 

(b) To establish a central employment bureau ready promptly to pro- 
vide fit incumbents to fill any vacancy. 

It is an anomaly that the Mayor is permitted to appoint Civil STervlce 
Commissioners whose duty is to restrain him and other members of his 
administration in carrying out political ambitions and desires. 


the necessity for such appointments "to prevent stoppage of pub- 
lic business .or to meet extraordinary exigencies." 

10. More frequent examinations. 

ii. Definite rules regarding physical tests as part of both 
entrance and promotional examinations. 

12. Periodical physical re-examinations. 

Duties of Commission. 

The duties of the Civil Service Commission include: 
i. The selection by competitive examination, and other- 
wise, of employes to carry on the work of the City 
and County. 

2. To ascertain, by supervision, the manner in which ap- 

pointees in the classified service are doing their work. 

3. To classify, in accordance with duties attached thereto, 

all places of employment in or under the offices and 
departments of the City and County. 

4. To see that so called temporary appointments are made 

only in cases of great necessity, and that they are in 
fact as in name, "temporary." 

5. To make such recommendations to the Legislative and 

Administrative heads of the Municipal Government as 
will increase the efficiency of the public service. 


Examinations are supposed to be held whenever the eligible 
list in any class shows signs of becoming inadequate to fill the 
demand for new appointees. 

The number of "temporary" employes in the classified service 
of the Municipality and their retention beyond the sixty day 
limit, would seem to indicate that in some grades examinations 
are not held with sufficient frequency, or, that an interval too 
great elapses between examination and certification. 

Delays in calling examinations and announcing results are 
said to have been inspired by administrative officials. 

Temporary Appointments. 

In October, 1914, more than 500 positions in the classified 
service were filled by "temporary" appointees. These temporary 
appointments, made by department heads, are sanctioned by the 
Civil Service Commission from month to month. Most of them 
have been "temporary" for periods long beyond the sixty day 
limit imposed by the Charter. To find out how long any posi- 
tion has been filled by a "temporary" or non-civil service em- 
ploye would require an independent investigation covering each 
position. The Civil Service Commission records do not show 
this in available form. 

A number of the positions filled by temporary appointees will 
probably always be so filled. This is true of many of the tem- 
porary appointments in the Health Department. They are posi- 
tions filled by inmates of the different institutions and positions 
carrying very small salaries or involving service either not gen- 
erally regarded as desirable or requiring special skill or knqwl- 


edge that can be acquired only in a very limited field. Fifteen of 
the "temporary positions" in the Health Department other than 
institutional help, pay $35 and less a month. There are, how- 
ever, about twenty "temporary" positions which could and should 
be filled from the civil service lists. 

The entire force of the Assessor's office is rated as "tem- 
porary". This will be continued pending the settlement of a 
question as to which positions were made "permanent" by the 
terms of the charter amendment extending civil service to var- 
ious county offices. 

In the Board of Public Works are 367 "temporary" employes. 
All of these positions would be filled from civil service lists if 
examinations were held with sufficient frequency to maintain ade- 
quate eligible lists. 


The following table shows the number of examinations held 
by the Civil Service Commission during the fiscal years 1912-1913, 
I9I3-I9H and four months of 1914-1915, to November 1: 

Fiscal year. 

Number of J Number 
examinations.! examined. 


1912-1913 63 3055 

1699 placed on eligible list 







977 placed on eligible list 
Papers not yet rated 
Rated but not adopted 

to Nov. 1. 




Papers not yet rated 
Examination held Oct. 31 

The fact that there are more than 500 temporary positions in 
the classified service, and inasmuch as few of these temporary 
positions can be filled from those who successfully pass the 12 
examinations of which the results have not yet been announced, 
would indicate that the Civil Service Commission is not holding 
a sufficient number of examinations. The record for the fiscal 
year 1912-1913, when 63 examinations were held, shows what can 
be done. The record for the two succeeding years shows a fall- 
ing off, which, on its face, suggests the existence of an influence 
successfully exerted to keep as many positions as possible under 
control of department heads and other appointing authorities. 

Some of the examinations on which ratings had not been 
made at the end of October were held in April and May. From 
the following record of recent examinations it will be seen that 
the interval between examination and certification runs from 3% 
to 9 months and that there appears to be little relation between 
the nature of the examination and number of persons examined 
and the length of time it takes to certify results. 

Here is the table ©f recent examinations (to Nov. 1, 1914): 


Plumbing inspector. 
Car repairer 

General clerks 

Police sergeants 

Engineers of fire engines. 

Telephone operators 



Captains fire department. 

Granite cutters 

Pipe calkers 

Boilermakers helpers 

Pantry workers & waiters 


Laundry workers 



Inspectors Mun. Railroads 


















Sep. 2^ 
Sep. 29 
Jan. 10 
Mar. 7 
Mar. 14 
Apl. 27 
Apl. 28 
Apl. 29 
May 23 
Aug. 24 
Aug. 24 
Aug. 24 
Aug. 24 
Aug. 24 
Aug. 24 
Aug. 29 
Sep. 5 
Oct. 31 

Mar. 2^ 
July 20 

Apl. 23 
Aug. 17 
July 13 
Sep. 21 
Oct. 1 





<T> <-► 

p O 


(0 J 


By the above table it will be seen that the results of the 
General Clerks' examination, in which 1037 persons were exam- 
ined, were announced in 103 days. The results of the examina- 
tion for car repairers, in which only 74 participated, were not 
announced for 294 days. 

The six examinations held August 24 were all "non-educa- 
tional." Marks in such examinations are based upon experience 
and physical fitness. The physical fitness is established at the 
time of examination and involves no calculation of comparative 
degrees. A man is either fit or unfit. Experience ratings are 
figured according to the length of time the applicant has worked 
at the particular trade or occupation. Applicants submit docu- 
mentary evidence as to experience and are marked on a fixed 
scale according to its length. Such examinations involve merely 
the sorting of credentials according to length of experience, and, 
where everything else is equal, a consideration of the applicant's 
age, also according to a fixed scale. Why it should take more 
than two months to rate the 104 papers involved is not apparent. 


More Examinations and Greater Dispatch in Rating. 

In view of the large number of positions in the classified ser- 
vice held by "temporary" appointeees, it would seem to be 
important that: 

i. More examinations be held. 

2. There be greater dispatch in rating papers after an exam- 
ination has been held. 

That these requirements are not fulfilled is either because: 

(a) The Civil Service Commission has not sufficient force to 
handle the work; or 

(b) The policy of the Commission is to hold few examina- 
tions and delay certification as long as possible. 

In 1912-1913 the Commission, with its present force, held 63 
examinations. It is hardly reasonable to suppose that 16 exam- 
inations in 1913-1914 and 9 examinations in the first third of 
1914-1915 would swamp the same organization to such an extent 
that the results of examinations held in April and May should 
be still undetermined at the end of October. 

The Eligible List. 

The Charter provides that the Civil Service Commissioners 
may remove from the eligible list any name that has remained 
thereon more than two years. It would be better if this were 
made mandatory. As advances are made in methods of munici- 
pal administration the requirements in applicants for positions 
in the public service become more exacting. The standard of 
fitness today will not measure up to the standard of two years 
hence. Inasmuch as the Commission has not always exercised 
its power to keep the eligible list within the two-year limit, 
the Charter should be amended so as to provide for the auto- 
matic cancellation of names that have been on the list for two 

What the Past Shows. 

To secure adequate supervision over the work of appointees 
and over the conditions of work in the various departments, as 
directed in the Charter, an efficiency bureau was organized. This 
bureau made a series of surveys and accompanied reports with 
constructive suggestions, the carrying out of which, it was 
believed, would have meant reduced expense and increased effi- 

These suggestions were presented to the administration heads 
and to the Supervisors in the form of recommendations. Excepl 
for a few minor suggestions adopted by the Board of Public 
Works the recommendations were ignored. 

The Supervisors later withdrew all appropriations from the 
efficiency bureau and it ceased to exist. The Civil Service ' 
mission ceased to make further recommendations for the im- 
provement of the municipal service. 


Commission Does Not Use its Power. 

That the Civil Service Commission does not exercise the 
power of supervision given to it by the Charter is plain from 
the conditions existing in the Sheriff's office. There, civil ser- 
vice employes drawing pay for doing one class of work, in a 
specified location, are doing nothing, or other work, in an 
entirely different place. The duties for which these civil ser- 
vice employes are paid are being performed by non-civil service 
employes — temporary appointees — whose terms of employment 
have long exceeded the sixty-day limit and for whose employ- 
ment, originally, there is nothing of record to justify as being 
necessary "to prevent stoppage of public business or to meet 
extraordinary exigencies." 

Removal of Incompetent Employes. 

Under the original civil service provisions of the Charter the 
Civil Service Commission was constituted the trial board to 
pass on charges preferred against civil service employes. 

Administrative heads resented this as an invasion of their 
rights to control their own departments. Their objection to 
have an outside commission pass on matters affecting the disci- 
pline of departments for which they were responsible, was given 
by some of the executive heads as reason for retaining incom- 
petent employes. 

It was in response to this protest that the Charter was 
amended to permit the trial of employes by the heads of depart- 
ments. The employe, now tried by his own superior, still has 
the right to appeal to the Civil Service Commission from a find- 
ing which is otherwise final. 

Incompetent employes still remain undisturbed. "Too much 
trouble" is the reason now given for failure to act. 

Department Heads Responsible. 

It is apparent that civil service in San Francisco would be 
more effective if heads of departments were more exacting in 
the quality of work they required from subordinates. The law 
now gives them the right to try and dismiss incompetent em- 
ployes. The law was amended at their request. They regarded 
the former law as interference. There has been no change in 
conditions since the Charter was amended. 

The declaration of department heads that getting rid of an 
undesirable employee by preferring charges of incompetency in- 
volves too much trouble, is probably correct. Without properly 
supported work records it is virtually impossible to prove in- 

The method usually adopted for getting rid of an undesirable 
employe is to abolish the position. There is nothing on the 
record to indicate the employe's unfitness and the undesirable 
thus displaced is restored to the eligible list at his original rat- 
ing. The result of this is that, in many cases, he secures an 


early reappointment to some position corresponding to the one 
in which he failed to make good. 

How Irregular Method Works. 

As an illustration of how this method works may be taken 
the case of a civil service watchman at the Isolation Hospital. 
He was assigned to duty at the leper hospital at a monthly sal- 
ary of $80. He hired one of the lepers to do his work for $10 
a month. The peculiar conditions necessarily prevailing at this 
institution made it possible for this arrangement to be main- 
tained for a considerable time before it was discovered by the 
superintendent. It was discovered and reported. Instead of 
preferring charges against the watchman the Board of Health 
got rid of him by abolishing his position. The watchman was 
restored to the eligible list, and, a few days later, certified back 
to the Isolation Hospital to fill a vacancy that had occurred in 
the position of night watchman. 

Another illustration: 

The Board of Health formerly employed five food inspectors. 
Three of them were incompetent. They were got rid of by 
reducing the number of food inspectors to two. Two inspectors 
could not adequately cover the field, but as the men removed by 
the reduction process were at the head of the eligible list, and 
would have been certified back in response to a request for more 
inspectors, part of the field was left uncovered. One of these 
men, rated unofficially by the Health Department as hopelessly 
inefficient, was on the eligible list for four years. 

Charter Provides Adequate Relief. 

Much of the criticism that civil service fails to provide com- 
petent help comes from the heads of departments, the appoint- 
ing powers within the municipal government. Presuming the 
good faith of this criticism and admitting its foundation on a 
basis of fact, the responsibility for this alleged failure rests, in 
the final accounting, with the critics themselves. 

For the success or failure of civil service to supply compe- 
tent employes the heads of departments are directly responsible. 

The law placing the greater part of the municipal working 
force under civil service not only does not contemplate the reten- 
tion of inefficient employes but it specifically provides for their 
elimination from the municipal service. 

To Get Rid of Incompetents. 

In the case of employes who have qualified through civil 
service examination and whose employment has been made per- 
manent at the end of six months probation, and of employes 
to whom permanency was assured by virtue of their having been 
in the public service at the time their department was included 
in the civil service field, proper supervision and the maintenance 
of work records would make possible a demonstration of an 


undesirable employe's unfitness from which there could be no 
effective appeal. Without records, charges of incompetence must 
be based upon opinion. With records, made from day to day, 
charges would be supported by facts. 

The establishment, therefore, of work records, would furnish 
department heads with the means for getting rid of incompe- 
tents from among the ranks of the "permanent" employes. 

Value of Probation Period. 

Employes certified from the eligible list are on probation for 
a period of six months. This probationary period gives the 
department head power to reject the unfit. 

The civil service examination is merely a preliminary test to 
eliminate the obviously unfit and to give the applicant pos- 
sessed of certain mental and physical equipment an opportunity 
to show whether or not his equipment can be adapted to the 
use of the municipality. The probationary period is the real 
test of fitness. 

During this time the department head is given an opportunity 
to judge of the probationer's possession of the qualities essential 
to efficiency but which are beyond the power of an examination 
to bring out, such as industry, accuracy, personal habits and 
judgment. After watching his work for six months the depart- 
ment head should know whether or not the probationer is fitted 
to fill the position to which he has been assigned. 

The same Charter provision which makes permanent the posi- 
tion of a probationer who has made good, makes it the duty of 
the department head to discharge an incompetent probationer. 

Only in rare cases has this power been exercised. If there 
is basis for the criticism that incompetent employes enter the 
public service through the civil service door, the fault lies, not 
with the civil service law, but with the department heads, who 
are the final judges. 


The Civil Service Commissions of Chicago and Milwaukee 
have standardized positions and salaries in the municipal service 
of those cities. New York, Los Angeles and other cities are now 
engaged in a similar work. The experience of all these cities 
is available to the San Francisco Commission. 

Titles of positions should be descriptive of the duties attached. 
Any plan for standardization should include a revision of titles 
where they fall short of this requirement. 


It is suggested that the Civil Service Commission could se- 
cure public support for its efforts by promoting public interest 
in its work. The only publicity now afforded is in the way of 
advertising vacancies in the classified service. 

The public is more interested in how the city's work is 


"being done than in the number of places to be filled. The 
public pays, not to provide jobs for part of the public, but for 
the dispatch of the public business. The public pays well and 
is entitled to value for its money. 

If the people know that the Civil Service Commission, 
responsible under the Charter for the efficiency of the munici- 
palitiy's working force, can insure the people value for their 
money only by organizing that force in a particular way, the 
people will insist upon that organization being put into effect. 

If, in the face of a public demand, the Civil Service Com- 
mission fails to secure the results which have given other cities 
cheaper and better government, the public will want to know 
why. If the Commission can then show that the responsibility 
for failure lies with the indifference or opposition of adminis- 
trative heads, public opinion will take care of the situation. 

The Civil Service Commission should take the public into 
its confidence. Other cities have done what the people of San 
Francisco through the Charter and its amendments have de- 
manded. San Francisco will get what it has asked for when a 
sufficient number of taxpayers realize the direct connection 
between the tax rate and the personnel and organization of the 
municipal working force. 


Salaries throughout the entire municipal service should be 
standardized on the basis of service rendered. 

The Civil Service Commission has recently established grades 
within four classes of the classified service, in accordance with 
salaries. The work will be extended to all classes. 

The classes so far graded are: 

1. General clerks. 

2. Stenographer-typewriters. 

3. Experienced Clerks. 

4. Deputies. 

In the first two classes positions paying not more than $100 
a month, and positions in the last two classes paying not more 
than $125 a month, are rated as entrance grades and hereafter 
must be filled from the eligible list. 

Positions in a higher grade must be filled by transfer from 
the next lower grade, or, if nobody in the lower grade wants 
the job, from the eligible list. Selection for advancement to fill 
a vacancy in a higher grade will be governed by rating, or, in 
the absence of efficiency records, by seniority. 

The rule establishing the grades also provides that when the 
salary of any position is changed in such amount as to place 
such position in another grade, it shall be filled, by transfer, by 
the person who would be entitled to fill it had such position 
been newly created with such salary. 

For the enforcement of this rule and the maintenance of 
these grades the Civil Service Commission must depend upon 

8 4 

the co-operation of the Board of Supervisors and administrative 

Classification on Wrong Basis. 

Classification according to salary is wrong in principle. It 
has been tried in other municipalities where salaries, as in San 
Francisco, had been fixed by favor and without regard either 
for the duties and responsibilities involved, or for uniformity, 
and has proved a failure. 

The right of the Supervisors and of some of the Commis- 
sions to fix salaries, cannot be questioned, nor can the right of 
the Civil Service Commission to classify the service and fix the 
grade and line of promotion of each office and place of employ- 
ment in the classified service. The result, however, is a con- 
flict of jurisdiction which leads to the undermining of the merit 
law in the interest of individual employes. Municipal employes, 
realizing that influence with Supervisors or administration heads 
might secure advancement regardless of merit, lose that incentive 
to greater diligence and proficiency contemplated by the provi- 
sions of the civil service law. 

Commission's Faith in New Rule. 

The Civil Service Commissioners believe that the new rule 
will gradually shake down the classification to a sound basis. 

The Supervisors still have the power to create positions and 
fix salaries and to grant increases in same, but if the Civil 
Service Commission can make the new rule stick, they can no 
longer name the beneficiary in these four graded classes. 

This, the Commissioners believe, will remove the element of 
personal favor from the functions of place making and salary 
fixing, and, by recognizing merit or seniority as the only qualifi- 
cations for advancement, will inspire in municipal employes a 
new interest in their work. 

The regrading of existing salaries on the basis of duties and 
responsibilities and the adoption of a new classification on that 
basis would, the impression seems to prevail, be impossible. It 
is recognized that to remove existing inequalities would mean, in 
many cases, salary reduction. Where a salary is higher than 
the duties of the position justify, it usually means that the 
incumbent has been able to exert pressure on the salary fixing 
power. To attempt a reduction of these inflated salaries would 
consolidate the influences behind them into an opposition which 
would be powerful enough, the Commissioners seem to believe, 
to prevent any progress in this direction. 

New Rule a Compromise. 

It is apparently in this belief that the Commissioners have 
accepted the present status. Unable to change salaries they 
hope, under their new rule, to be able gradually to reshuffle 
the employes so that in course of years there will be a closer 
relation between merit and pay. 


The Commissioners evidently believe that the inability to 
name the beneficiary either of a new position or an increased 
salary will limit the creation of superfluous positions and do 
away with unwarranted salary increases, and that, no new in- 
equalities being created, those now existing will gradually dis- 

Chicago's Experience. 

In view of the evident, belief of the Civil Service Commis- 
sioners that classification based on salaries will work out finally 
to the same thing as salaries based on duties and responsibility, 
the following extract from the report of the Chicago Civil Ser- 
vice Commission is of interest: 

"When the civil service law was passed in 1895 
ostensibly taking an army of employes out of politics 
and placing them under the merit system, little was 
known in American cities regarding correct administra- 
tion of civil service. The law provided that the service 
must be classified and graded and that promotion must 
be from the lower to the higher grades by open com- 
petition. The only feasible grading plan readily at hand 
was that of the salary received. Therefore a grading 
system was adopted based on that alone. It was soon 
recognized that the scheme was unsound. 

"Pay determined grade — not duties and responsibil- 
ity. The personal equation and not competitive exam- 
ination as contemplated by law, determined pay. As a 
result the principles of civil service were systematically 
undermined and the vast majority of persons in the 
classified service stagnated for lack of incentive. The 
time of the Committee on Finance and of the entire City 
Council was occupied with wrangles over individual 
claims, and months were wasted during each annual 
budget-making period." 

Standardization of Salaries. 

Before the salaries paid in the public service of the City and 
County of San Francisco can be rearranged to correspond with 
the duties and responsibilities of the various positions, and 
classified throughout the service, there must be an agreement 
for full co-operation between the Board of Supervisors, a num- 
ber of Commissions that have been intrusted with power to 
fix salaries and the Civil Service Commission. Public co-opera- 
tion will also be necessary insofar as it may be required to 
amend the Charter in regard to the compensation allowed for 
certain offices. 

The Charter fixes a large number of salaries, even of minor 
positions. The Board of Supervisors has the power to fix sal- 
aries in cases not otherwise provided for. The Board of Health, 
Board of Public Works, Park Commission, Playground Com- 
mission, Board of Education and Board of Library Trustees all 
have salary fixing power. 

The appointees of the Park Commission, Playground Com- 


mission, Board of Education and Board of Library Trustees are 
not subject to civil service regulations. 

With the power to fix salaries in so many hands, with part 
of the force under civil service regulation and the balance 
dependent for their positions upon favor, the problem of stand- 
ardization presents difficulties which can be overcome only by 
the surrender of the salary fixing power to one authority. 

This can be done by co-operation, but will be successful 
then only as long as the single authority is guided entirely by 
facts instead of favor. 

How to Secure Co-Operation. 

As a means of securing this co-operation it is suggested that 
the Board of Supervisors pass an ordinance which will: 

i. Recognize the grades and classes of the Civil Service 

2. Provide for uniform salaries. 

3. Provide that salaries for new positions in classified ser- 
vice be fixed by Civil Service Commission at the same time 
that Commission decides on designation of new positions. 

4. Prevent appropriations which may place employes out of 

5. Recognize ascertained merit and increased duties and 
responsibility as the only basis for individual salary advancement. 

6. Forbid lobbying or soliciting for salary increase on the 
part of any municipal officer or employe. 

Resolutions to the same effect passed by the other Boards 
and Commissions intrusted with appointing and salary fixing 
power would secure, for the future, uniformity of action through- 
out the municipal service. 

Such co-operation would pave the way for a complete and 
uniform revision in which salaries would be based on duties and 
responsibility, and, in accordance with the Charter, "like salaries 
be paid for like duties." 

Need for Readjustment Obvious. 

An examination of the salaries as set down in the 1914-15 bud- 
get emphasizes the need for readjustment. 

In the recent examination by the Civil Service Commission 
for telephone operators 184 took the examination. Of the 171 
that passed and were placed on the eligible list, 157 were 
marked 100 per cent. The Civil Service Commission justified 
this generous marking by the declaration that, after two years 
experience, all telephone operators were equally competent, 
that all applicants who could prove this experience had been 
given 100 and a standing on the eligible list in accordance with 
their age, 25 being accepted as the age of highest efficiency. 

From this it would seem that there should be little varia- 
tion in the salaries paid by the city and county to telephone 
operators. The budget tells another story. Of fourteen tele- 
phone operators one is paid $540 per annum, another $720, a 


third $780, ten are paid $1020 and the topnotcher receives $1200. 

There are other discrepancies on which the titles of the 
positions throw no light. 

One "Stenographer-bookkeeper" is paid $960. Under the 
same title another is paid $1500. 

The salary of one "clerk-stenographer" is $2400, but when 
the title is reversed, "stenographer-clerk," the salary is $1500. 

The "stenographer-typewriter" in the Coroner's office is 
paid $1800 a year. The "stenographer-typewriter" in the Dis- 
trict Attorney's office is paid $900. 

For positions carrying the title "stenographer" the compensation 
varies from $720 to $2400. (Chart VI.) There are 2 at $900 

4 " 1020 

4 " 1080 
9 " 1200 
1 " 1320 
1 " 1380 

5 " 1500 

1 " 1680 

2 " 1800 
1 " 2100 
4 " 2400 

"Messenger" in the Superior Courts means a job paying 
$720 a year. In the Coroner's office the "messenger" is paid 
$900; in the Department of Electricity, $1020; in the Recorder's 
office, $1200, and in the Board of Public Works, $1500. 

The Work of Standardization. 

San Francisco, and every other city that would secure 
effective service, must learn to deal with its working forces on 
some other basis than abuse, indifference, cajolery, favoritism 
or fear. 

The complaint is made that, even under civil service, which 
secures permanency of position to the competent employe, it 
requires just as much outside influence to secure an advance 
in salary as it did, in the old days of the spoils system, to 
secure a municipal position. 

Employes must feel the incentive to work, from definite 
opportunities ahead. The public service in San Francisco offers 
this incentive now only in a limited degree and in certain 

The Civil Service Commission is the authority upon which 
the Charter imposes the duty of reorganizing the municipal 
service. The foundation of this reorganization must be the 
standardization of salaries, throughout the municipal service, 
on a basis of duties and responsibilities. 

How Salaries May be Standardized. 

Similar reorganizations have been effected in other munici- 
palities and from their experience the Civil Service Commission 

*i s $ $ ! s i ! $ ,? s s s §5$ 8 $ $ $ s 



* * 



— r 



> *> 
2 5 









5S w 



1 - 


s s 







+ + 

+ +* 




can profit to the extent of securing a plan of procedure that has 
stood the test of practice. 

i. A definite classification should be made of each 
position, based on independent investigation of duties act- 
ually performed by each employe. 

2. A definite scale of salary rates should be marked out, 
based upon the nature of duties of each position. 

3. Title should be readjusted so as to be descriptive of 

4. Adoption of classification of positions, rates of com- 
pensation and revised titles as standards. 

5. Certain factors should be decided upon for efficiency 
ratings in each department, adopted as a standard and 
periodical reports rendered to central authority. 

6. All promotions and demotions in salary rates should 
be based on these reports. 

For the effective application of the civil service principle 
classification is essential. The public service has benefited by 
the limited classification that has already been effected in the 
municipal service. An illustration showing the relation between 
classification and civil service and how both directly affect the 
tax payer may be taken from the recent records of the Civil 
Service Commission. 

Under an amendment to the Charter in 1912 the authority cre- 
ating a new position must secure from the Civil Service Com- 
mission the proper designation of such position. At a recent 
meeting of the Civil Service Commission there was received from 
the Board of Public Works a communication to the effect that 
the Works Board desired to appoint an "inspector of patent 
chimneys" at $150 a month. The Civil Service Commission was 
asked to supply a title for the new position. The Civil Service 
Commission replied to the effect that the inspection of patent 
chimneys came within the duties of a building inspector, that 
there was no need for any new designation and that an inspector 
capable of doing the work would be certified to the Board of 
Works from the eligible list of building inspectors. 

The Board of Works replied to the effect that as long as 
the work could be done by a "building inspector" there would 
be no need to certify anybody, as the inspectors already on the 
payroll would be able to do all the "patent chimney" inspecting 
that would be required. 

This incident also serves to illustrate an important advantage 
of civil service from the tax payers' point of view. Where the 
appointing power is not able to select the appointee, or, to put 
it another way, where the appointment is made on a basis of 
merit instead of personal favor — either to the appointee or his 
friends — only necessary appointments are made. There is no 
reason to doubt that in the case quoted, if there had been no 
civil service to classify the "patent chimney inspector" as a 
building inspector, and if there had been no list of eligible 


building inspectors, the municipal payroll would have been 
saddled with a needless charge of $150 a month. 

Civil service has taken more than 4000 positions beyond the 
reach of personal favor and placed them on a merit basis. 

The extension of civil service to all branches of the city 
service would mean the elimination of patronage and make pos- 
sible a reorganization of the municipal forces which would make 
the municipal service attractive to the best class of worker and 
would insure the tax payer value for the money expended in 
salaries and wages. 

Physical Examinations. 

All applicants for places in the classified service shall 
be subjected to examination. . . . Such examination 
shall . . . include, when appropriate, tests of physi- 
cal qualifications, health, etc. (Sec. 4, Article XIII of 
the Charter.) 

The Commission shall provide for promotion in the 
classified service ... by competitive examination. 
(Sec. 8, Article XIII of the Charter.) 

From the above extracts from the Charter it is plain that 
good health is deemed an essential requisite for employment in 
the public service and that the Charter enjoins upon the Civil 
Service Commission the duty of applying to candidates for pro- 
motion the same tests used in selecting and grading applicants 
for places in the classified service. 

Rule Just to City and Employe. 

Of the wisdom and justice of this requirement there can be 
no question. The municipality, which offers permanent employ- 
ment at good pay, is entitled to the best that the employe can 
give. No employe in poor health is able to fulfill his side of 
the contract. The employes of the municipality have an equal 
right to protection from any danger that may threaten, or undue 
demands that may be made on them, by reason of any disease 
or physical disability of which a fellow employe may be the 

In the case of new appointments the Commissioners do 
apply such physical tests as are deemed sufficient to comply 
with the law. Such tests are not applied, however, in all cases 
of promotion. 

As a business precaution, the physical test is even more 
necessary in establishing fitness for promotion than for original 
entrance. Promotion implies increased salary and the more the 
city pays an employe the greater the importance that the ser- 
vice rendered be efficient. Furthermore, increased salary, in cer- 
tain branches of the municipal service, means increased pension 
in case of physical breakdown. 

On a recent occasion, in the fire department, officers were 
promoted to higher rank, with increased pay, carrying increased 
pension rights, who, it was frankly admitted, were physically unfit 
to pass the tests which should have been imposed 


1. In obedience to the Charter; 

2. In justice to the tax payer, and 

3. In the interest of efficiency. 

An appeal to the State Supreme Court was taken from the 
action of the Civil Service Commissioners and upon the decision 
that will be handed down the future policy of the Commission 
will be based. 

Whatever the decision of the courts in this particular case, 
the Civil Service Commissioners should establish a definite rule 
regarding physical examinations so that there can be no mis- 
understanding in the future as to the necessity for a candidate 
for promotion, in any branch of the classified service, proving 
his physical fitness. 

Periodical Physical Examinations. 

To the Civil Service Commission is intrusted the duty of 
securing for the public service the highest efficiency. It is 
suggested that one of the means for attaining this end would be 
periodical physical re-examinations for all employes in the classi- 
fied service. 

This is done by many commercial organizations and has 
proved as beneficial to the individual employe as to the service 
of which he is a part. 

In the light of past experience, whether this suggestion is 
adopted or not, the Commission should without delay establish 
a definite rule making the physical test part of the promotional 
examination as it is of the entrance examination. 

9 2 


Three departmental studies have been made and the results 
are presented with this report. Where the studies have devel- 
oped what appeared to be shortcomings their enumeration has 
been accompanied by suggestions for their remedy. 

These studies emphasize the need of a complete survey of 
every department of the municipal government. 

One of the methods that naturally suggests itself as a means 
of meeting the growing expense of carrying on the public busi- 
ness is to increase the efficiency of the present machinery; 

Before this can be accomplished an exact knowledge of exist- 
ing conditions is necessary. It is necessary to know the field of 
activity actually covered by each department and division; the 
amount of work being done; the methods by which it is carried 
on and the means used in recording and measuring results. 

To know that the entire field is covered it is also necessary 
to know the full extent of that field; to learn from Charter, ordi- 
nances and state law the duties imposed upon each department, 
division and official. 

A comparison between what should be done and what is being 
done will reveal such neglect of duty as may exist and will call 
attention to the advisability either of enforcing or repealing 
overlooked laws and regulations. 

The next step would be a consideration of how things are 
done with a view to finding out how they could be done better. 

The only way to secure all this information is through the 
process of a complete survey. 

Surveys are necessary: 

i. To locate faults in organization. 

2. To disclose such weaknesses as may exist in admin- 
istrative methods. 

3. To test administrative and control value of account- 
ing system. 

4. To secure co-ordination between departments in 
their relation to the municipal government as a whole. 


A survey of departmental organization would include all offi- 
cials and subordinates and show the duties and responsibility 
undertaken by each. Duties and lines of authority for each 
position should be standardized, defined and reduced to writing 
and the whole summarized graphically in chart form. 

Such a chart will show how thoroughly the work of the 
department is organized. Careful study of the chart will indi- 


cate the lines of shifting in organization that will secure the 
best attention to the entire work involved and the most effective 
distribution of duties and responsibility. 

Value of Charts. 

When such changes as are decided upon have been made 
each department and division should be furnished with an 
amended chart. Such charts enable new officials or employes to 
gain in a few minutes a general knowledge of the work of their 
department, and of the particular responsibilities resting upon 
them. Under present methods an officer may spend a year or 
longer in his office without such complete and necessary knowl- 

The organization charts accompanying this report are merely 
descriptive of present conditions. No attempt has been made to 
present systematic criticism or to formulate constructive plans 
for overcoming defects in the organization. These charts, how- 
ever, furnish the starting place for further study and will serve 
their purpose if they focus the attention of officials and citizens 
on concrete problems of organization. 

Weakness in Administrative Methods. 

Some of the faults of administration may be due to legal 
regulations and restrictions imposed by Charter, city ordinances 
and state law. A study of these regulations and restrictions and 
the effects of their application would make possible a deter- 
mination of the changes in the law which would be required to 
permit changes in administrative methods. 

The business methods of each department should be studied. 
This would include such activities as purchasing, handling of 
contracts and supplies, and methods of employing and supervis- 
ing labor. 


The Charter gives full authority for the installation of an 
accounting system uniform throughout the service. A survey 
will show how far the present system falls short: 

1. In the exercise of control. 

2. In yielding information of administrative value. 

In each department studied the accounting system was dif- 
ferent and in none was it of value except to measure the decline 
of the annual appropriation. In no case were accounts found 
to be of administrative value. In no case was evident any desire 
to make such use of them. The question of cost, as a measure 
of value received, appears to be given no administrative con- 
sideration and the establishment of standards is not attempted. 


In studying the departments in their relation to the govern- 
ment as a whole one object in view should be the readjust- 
ment ot overlapping functions and conflicting responsibility. 


Consideration of the departments in their relation to each 
other would involve a study of functions now performed by 
one department or division but which might be administered 
more naturally and more efficiently by another. 

For instance: plumbing inspection, which involves problems 
solely of construction, is under the jurisdiction of the Board of 
Health, while problems involving the amount of air space per 
occupant in a proposed lodging house — sanitary problems — are 
passed on by the Bureau of Building Inspection. Between street 
cleaning and street repairing the relation is too close, in the 
opinion of some authorities, to permit of these functions being 
efficiently administered by separate organizations. 

These are some of the problems upon the right solution of 
which efficient and economical administration depends. 

Conditions Justify Survey. 

In addition to appropriating the necessary money to make 
such a survey the Board of Supervisors should give the work its 
full support. The findings and recommendations resulting from 
the survey should, from time to time, be made public to the end 
that public interest in the work be aroused and sustained. 

In the growing cost of government may be found ample war- 
rant for incurring such expense as may be necessary to make 
such a survey. That it would pay is sufficiently indicated by 
the results of the studies made by this Association. 

Departments Selected. 

The departments selected for study were: 

i. The Police Department, because police protection 
costs, in San Francisco, more per capita than in any other 
city in the world. 

2. The Health Department, because the per capita cost 
of health and sanitation in San Francisco is unusually low. 

3. The Sheriff's office, because it is believed that the 
Sheriff as a peace officer is superfluous in a consolidated 
city and county government and that the administration 
of the office involves much needless expense. 

In all these departments the public has a vital social as well 
as financial interest. The total expense of the three departments 
for the present fiscal year is $2,424,043 or 16.25 per cent of the 
total expense. 

Police Department. 

The study of the Police Department developed the fact that 
little more than half the force — 56.24 per cent — is engaged in 
street patrol duty. The charts accompanying the report show 
how the remaining 43.76 per cent is distributed. 


Past reports and available records do not contain the informa- 
tion upon which any estimate of the efficiency of the depart- 
ment can be based. Judged by the measure of cost San Fran- 
cisco should have the most efficient police department in the 
world. The department records do not show whether or not this 
is the case. With the report are suggestions as to how this 
information can be developed. 

The study further showed that the San Francisco Police 
Department makes no provision for the adequate instruction of 
new officers; that the detective bureau is very much larger than 
provided in the Charter; that police officers are detailed to 
clerical positions which could be filled more efficiently and at 
less cost to the city, by civilian clerks; that police officers are 
performing duties in various municipal departments which could 
be intrusted to uniformed messengers; that the City Prison is 
well managed but that there and in other branches of the 
department the accounting for supplies is such as neither to 
afford control nor yield information of administrative value. 

Health Department. 

The study of the Health Department shows the need of 
adequate cost accounting and accounting control over supplies. 

The work of the department appears to be well organized 
and on this account it is deemed of importance that the account- 
ing system be so ordered that standards may be established 
by means of which the department's continued efficiency and 
the efficiency of future administrations can be measured. 

Sheriff's Office. 

The position of Sheriff as a peace officer and a keeper of pris- 
oners could be merged, without any sacrifice either of efficiency 
or public convenience, with that of Chief of Police, and this with- 
out adding any considerable burden to the head of the Police 
Department. The advisability of so amending the Charter is 

In view of the fact that the form of local government makes 
the position to a large extent superfluous, the compensation now 
enjoyed by the Sheriff is too large. 

In the accompanying study of the Sheriff's office some com- 
parisons are made of the salary paid to the Sheriff and that of 
other public officials, municipal and federal. 

Attention is also called to certain fees now retained by the 
Sheriff and which, it is believed, should legally be paid into the 
city treasury for the benefit of the municipality. 

Attention is called to the administration of what is known as 
"Sheriff's patronage" and how it bars the adoption of obvious 
economies which would further increase efficiency. 

9 6 



Changes Requiring Charter Revision. 

1. The experience of other cities shows that greater 

efficiency in the management of a police force 
results from intrusting the administrative power 
to a single commissioner instead of to a board 
composed of several members. 

2. It is desirable that the Police Commission should 

have full control in the matter of enforcing the 
laws. The present Charter confers this power 
but, in the light of past history, it might be ad- 
visable for the Charter to be so amended as to 
specifically make the Police Commission inde- 
pendent of the city's legislative body. 

Changes not Requiring Charter Amendment. 

i. Establishment of records to show hours of service 
on street. 

2. Establishment of inspection service under direct con- 

trol of Commission. 

3. Maintenance of personal efficiency records, based on 

most approved methods of police administration. 

4. Use of efficiency records in determining fitness for 


Under the present system an officer may be 
promoted because he is a good student. By bas- 
ing promotion on record he would be promoted 
only because he was a good policeman. 

5. Special investigation by Civil Service Commission of 

personal history of all applicants for positions on 
the force. 

6. Establishment of school of instruction in which new 

officers could be trained and all officers made 
familiar with improved police methods. 

In this connection new officers should be de- 
tailed for duty as bailiffs in the police courts. 
This would afford the recruit a schooling in court 
procedure which would help him, later on, in the 
intelligent preparation of cases for trial. It would 
also eliminate from the service eight "soft jobs" 
to obtain which members of the department fre- 
quently enlist outside influences. 

7. Revision of method of selecting men for detective 

duty to limit such assignments to officers showing 
special aptitude. 

The detective bureau as at present constituted 
is too large — it has three times as many mem- 
bers as the Charter provides. Assignments to 
detective duty are largely matters of favor, not in- 
frequently concessions to outside influence. Im- 
proper assignments to the detective force weaken 

►See organization chart of Police Department, Chart VII. 


> 2 o 

> Si* 

' *? 


> ^ 





II U ^ 

< o 


!l * 









I -1 






if- | 

■ I 

•3 n| 

? ° > *■ 




i ? - 





vi ! 



J ** 

s 8 

VI so 





<* l 

8 ' 

K 1 



m « 


































E3 S3 

is ia si Is la 





i^s s^ p^r^i n 


the street patrol and at the same time hamper 
the work of the detective bureau. 

8. Employment of civilian clerks to do much of the 

clerical work to which members of the uniformed 
force are now assigned. 

9. Recall to police duty of officers now assigned to 

different municipal departments. Their places in 
the departments could be filled by uniformed 

10. Standard notebooks for members of the street patrol 

and installation of more complete system of 
written reports. 

11. Installation of accounts at the City Prison by means 

of which standards of feeding costs and other 
expenses could be established and unit costs re- 
ported currently. 

12. Installation of records in the police photograph 

gallery which would show currently the use made 
of supplies. 

This both for the information of the Commis- 
mission and the public and for the protection of 
the officers detailed to the gallery. 

13. Simplification of records in the property clerk's 


It is believed that this can be done without 
any sacrifice of the safeguards which now protect 
the property and evidence intrusted to that 

14. Withdrawal of privilege permitting police officers to 

receive money rewards for services performed 
in the line of regular duty. 

The tendency of this practice is to inspire 
special diligence in work likely to yield extra 
recompense and cause a corresponding neglect 
of other duty. 

15. Prohibition of the sale of tickets for any purpose 

by members of the uniformed force. 

16. Revision of the form of annual report. 

(a) The present report gives no account of the 

administration of the City Prison although 
this institution costs the city annually, in 
salaries and maintenance, more than 

(b) Although the Police Department costs the 

city annually more than $1,500,000 the re- 
port includes no financial statement ex- 
cept the records of transactions affecting 
the police pension fund. 

(c) The tables of arrests are without value as in- 

dicating the efficiency of the department. 
They do not show the proportion of ar- 
rests made on the initiative of the depart- 
ment and the proportion resulting from 
outside information. 

(d) There is no comparison made between num- 

ber of complaints and number of arrests. 

9 8 

(e) There is no table showing the disposition of 

all cases. 

(f) There is no report of the work done by the 

detective bureau. 

Cost of Police Protection. 

San Francisco pays more for police protection than any other 
city of the United States. The local force is probably the most 
expensive organization of its kind in the world. A survey of 
the department's methods and organization was undertaken for 
the double purpose of finding out why its cost was so much 
greater than in similar cities and whether or not its efficiency 
was such as to justify the high expense. 

Taking the figures of the United States Census Report for 
1912 as a basis — and this is the only available reliable basis for 
a just comparison — police protection costs in San Francisco 43 
per cent more per capita than the average cost in the first 
fifteen cities of the United States, including San Francisco. 

The per capita cost in San Francisco was $3.43 per annum. 

The average per capita cost in the first fifteen cities of the 
United States, including San Francisco, was $2.40. 

Comparison with Cities of Similar Size. 

From the same authority a comparison may be made between 
the cost of the San Francisco Police Department and that of six 
other cities of approximately the same size — having a population 
of from 400,000 to 600,000. 
Here are the figures: 

City. Population. Per Capita Cost. 

Cleveland 596,970 $1.50 

Baltimore 569,560 2.21 

Pittsburgh 550,667 2.07 

Detroit 503,445 2.01 

Buffalo 439,666 2.20 

Milwaukee 400,488 1.54 

SAN FRANCISCO 433,488 3-43 

The average per capita cost of the above named six cities is 
$1.92, or 78 per cent lower than the San Francisco cost. 

Compared with Other Seaports. 

One of the reasons advanced for the high cost of the local 
department is that San Francisco is a seaport city. A compari- 
son with other large seaports does not confirm this. 

City. Per Capita Cost. 

New York $2.97 

Philadelphia 2.69 

Boston • 3-19 

Baltimore 2.21 

New Orleans I-I2 

Seattle T -54 

Average for the above 2.29 



From this it will be seen that police protection in San Fran- 
cisco costs 50 per cent per capita higher than the average per 
capita cost in six of the largest seaports of the country. 

Police Department not Only Expense. 

In addition to the most expensive police department in the 
country — if not in the world — San Francisco supports several 
varieties of "special" police, numbering in all more than 700, 
and more than a score of detective agencies. 

The cost of this supplementary police protection is not avail- 
able. The expense is borne by individuals and corporations and 
by them distributed among the community in the form of higher 

Organization of Police Department. 

The Police Department is under the management of three 
commissioners and the executive head — the Chief of Police — is 
appointed by them. 

As the department is now organized (see Chart No. VIII) 
only 56.24 per cent of the force is engaged in street duty. The 
other members of the force are detailed to detective duty, sta- 
tion duty and special duty. 

Special Duty — Policemen as Messengers. 

The assignment "special duty" covers a variety of occupa- 
tions, many of them but remotely connected with police work. 
The majority of the policemen assigned to the municipal depart- 
ments could be returned to duty and the work they are now 
doing intrusted to uniformed messengers. 

Policemen as Clerks. 

Policemen are picked for certain mental, moral and physical 
qualities, the possession of which is supposed to fit them pecu- 
liarly for police duty. They are picked and then trained. 

In recognition of the special fitness exacted and of the risks 
involved in police work, members of the force are paid a very 
high rate of wage. The salary for a patrolman in San Francisco, 
be he novice or veteran, is $1464 a year or $122 a month. Pro- 
motion is based on merit and the conditions of retirement, 
whether for age or disability, are on a generous scale. 

In San Francisco more than 11 per cent of the men thus 
picked and paid are assigned to duties which neither require 
the fitness nor involve the dangers which are the principal fac- 
tors in establishing an unusually high rate of remuneration. 

In addition to those performing messenger service for the 
different municipal departments many are assigned to purely 
clerical tasks. 

Civilian clerks would do better work for considerably less 
money and their employment would not only make possible the 
maintenance of adequate records but would release more than 
100 trained men for active police duty. 





Detective Bureau. 

Practically fifty members of the regular force are on duty 
with the detective bureau. Three of them — a corporal and two 
patrolmen— as chauffeurs. There are also about twenty members 
of the regular force on plain clothes duty, conducting special 
investigations for the Chief of Police. 

There are no records maintained by which the efficiency of the 
detective bureau can be judged but there seems to be no doubt 
that there are too many members of the regular force assigned 
to that bureau, that their selection is not based on personal fitness 
and that their retention does not depend upon their making 

School of Instruction. 

In the San Francisco Department no systematic provision has 
been made for the instruction of recruits. New members of the 
force, while waiting for their uniforms, are sent out with patrol 
officers and given some opportunity to absorb some knowledge 
of their duties. What they get beyond this, in the way of 
instruction, depends upon their own powers of observation and 
the interest taken in them by their company commanders. 

Eight patrolmen are now detailed for duty at the police 
courts as bailiffs. Selections are made by the Chief of Police 
and appointments to this duty are regarded as marks of favor. 

The presence in the police courts of uniformed officers is 
probably a necessity, principally on account of the moral influence 
the uniform is presumed to exert. A uniformed recruit, how- 
ever, would be just as morally effectual as a uniformed veteran. 

It is suggested that only recruits be assigned to this duty, a 
month or two of which would give the new officer a working 
knowledge of court procedure which would be of material aid 
to him in the future in preparing his cases for trial. 

City Prison. 

The City Prison, located on the top floor of the Hall of 
Justice, is well managed. In the matter of administrative records, 
however, there is much to be desired. While it is possible from 
the records now maintained to dig out practically any informa- 
tion that may be desired no provision has been made for current 
reports of facts of administrative value. 

The commissary is well administered, which is the best 
reason why standards should be established by which subse- 
quent administrations could be judged. 

No records are kept of the unit costs of feeding and mainte- 
nance, all expenditures being jumbled together in one continuous 
and uncontrolled account misnamed: "Subsistence of Prisoners." 

Here, as elsewhere in the city service, surplus appropriation 
is used for the purchase of staple supplies. No stores accounts 
are kept and without these a computation of operating costs 
is not possible. 


Stores Accounts. 

Stores accounts are necessary — and lacking — in other bureaus 
of the Police Department. The purchase, care and distribution 
of supplies used in the Police Department are intrusted to five 
different officers: 

(a) The property clerk; 

(b) The Commissary clerk; 

(c) Police photographer; 

(d) Officer in charge of automobile repairs; 

(e) Officer in charge of motor cycle repairs. 
Throughout the department care seems to be exercised in the 

inspection of purchases upon delivery, testing them for weight 
and quality and making careful comparison with invoices. 

The property clerk issues supplies only on requisition signed 
by the head of the division making the request. He keeps a 
record of all supplies issued by him. 

Further than this, however, there is no record of supplies 
beyond the fact of their purchase. No stores accounts are kept 
and no report is made as to the use made of supplies. 

In the police photograph gallery where a large amount of 
expensive supplies is used and where work is done for a num- 
ber of city departments other than the police department, there 
is no record whatever of the use made of supplies; an inventory 
of supplies is never taken and the record of work done in the 
gallery is very incomplete. 

There should be accounting control over all supplies handled 
by the police department both for the protection of the officers 
handling them and of the city. 

Property Clerk's Records. 

In addition to handling and issuing certain supplies the 
Property Clerk is the custodian of property taken from prison- 
ers, property held as evidence, stolen property recovered but un- 
claimed and of such lost property as comes into the hands of 
the police. Assisting the Property Clerk (who holds the brevet 
rank of captain) are i corporal and 5 policemen. 

Detailed records are kept of all property coming into this 
office and of its disposition. The system by means of which 
this is done appears to be unnecessarily cumbersome. It is 
believed that a system could be installed which would furnish 
adequate protection to property and evidence and could be main- 
tained at considerably less expense to the city. 

The salary cost of the Property Clerk's office amounts to 
$11,280 annually. 

Records of Personal Service. 

Service records by means of which the personal efficiency of 
members of the force could be judged are not maintained, al- 
though promotions are supposed to be based on merit. 

Police officers seeking promotion from one rank to a higher 
are required to pass a civil service examination. In addition to 


passing this examination the candidate's record of actual service 
should be satisfactory. Without adequate service records there 
is no means of judging this. Under the present system promo- 
tion comes not so much because an officer is a good policeman 
as because he is a good student. 

Rewards for Policemen. 

Police officers are now allowed to retain rewards paid by out- 
siders for success in certain lines of work. The government pays 
a reward for the arrest of deserters from the army and navy; 
the newspapers pay a reward for the arrest of a newspaper 
thief; rewards are paid from time to time for the recovery of 
stolen property. 

A percentage of all rewards is paid into the police pension 
fund. The balance goes to the officer. 

It is believed that this practice tends to make many officers 
devote their best if not exclusive efforts to cases that promise 
rewards and that the value of this occasional extra compensation 
as a spur to diligence is more than offset by the neglect it may 
cause of routine duty. 

Policemen as Ticket Sellers. 

Every year the police force gives a ball for the benefit of the 
widows and orphans fund. Tickets for this ball are sold by mem- 
bers of the department, usually during hours of duty and to the 
citizens on their respective beats. 

It is unfortunately true that many citizens regard a request 
from the policeman on the beat as a demand to comply with 
which is good policy. On this ground alone this practice should 
be abandoned. 

The Annual Report. 

The annual report of the Police Department is of little 
value either as a record of its activities or a demonstration of 
its efficiency. This, to a large extent, is the natural result of 
not maintaining adequate, current records. 

The report should show the unit costs of the different func- 
tions, and, where possible, comparisons should be made with the 
cost of doing similar work in other cities. 

The tables of arrests should show the proportion made on 
the initiative of the department and there should be a compari- 
son between the number of complaints and the number of 
arrests. The report also should show the disposition of each 
case in order that the public could judge whether or not the 
police were making unnecessary arrests and with what care they 
prepared their cases for trial. 

The report should also include a record of the work done 
by the detective department. 


Changes Which Would Not Require Charter Amendment. 

i. Installation of time and service records for all employes 
in all branches of the Health Department with regular 
reports to enable Central Office to maintain a complete 

2. Use of time reports as base for payrolls, and service 

records as guides in regulating salaries and determin- 
ing fitness for promotion. 

3. Standardization of positions and salaries throughout the 

service and revision of titles so that they would be 
descriptive of duties. This work can be best done in 
co-operation with the Civil Service Commission. 

4. Establishment of accounting control at Central Office 

over all stores in all institutions under jurisdiction of 
Board of Health. 

5. Distribution on Central Office records of expenditures 

for personal services, supplies and materials in all de- 
partments according to the functions or projects into 
which they enter. 

This would make possible: 

(a) The current computation of costs of all opera- 

(b) The establishment of standards by means of 
which the administrative authority could judge 
the efficiency of: 

(1) Employes, 

(2) Operating methods. 

6. Uniformity of expense segregation so that the cost of 

similar work in different institutions, and in the same 
institution at different periods can be intelligently com- 

7. Inclusion in the expense records of the department all 

outlays and expenditures for maintenance and repairs 
and operation regardless of the source from which the 
money is derived. As it is now a considerable por- 
tion of the annual expense, such as for gas, electricity, 
water, postage, stationery, the cost of many repairs 
and some janitor service, does not appear at all on 
the records of the department. 

8. Uniforms for members of the department's inspection ser- 


9. The inspection reports in the Monthly Bulletin issued 

by the Health Department would be more illuminating 
if, in each division, the percentage was shown of the 
entire field covered. 

To illustrate: In February, 1914, 102 bakeries were 


inspected. This would mean more if the total 

number of bakeries in the city was stated. 

io. To secure a fairer distribution of the cost of inspection 

many of the businesses subject to the department's 

supervision might be compelled to pay for this work 

in the form of licenses. 

It is suggested that a survey be made of the entire 
inspection field, showing the cost of each kind of 
inspection and the proportion of each field now 
covered by the service. This report could be used 
as the basis of recommendations to the Supervis- 
ors asking that license ordinances be passed. 

11. Incorporation in reports of Tenement House Inspectors 

of points that might be of value to City Planning Com- 

12. Closer co-operation between the work of the District 

Sanitary Inspectors and the division of school hygiene. 

13. Extension of the use of score cards to all businesses 

subject to inspection with publicity, particularly in cases 
where a low score indicates reluctance or neglect to 
comply with health requirements. 

14. The establishment of a publicity department under the 

direction of the Health Officer. This would cover a 
field of activity now neglected. Properly directed pub- 
licity would interest the public in the work of the 
Board of Health, and, by securing better co-operation, 
would add to the department's efficiency. 

15. A reorganization of the Central Emergency Hospital so 

that the personal attendance of the Chief Steward out- 
side of his regular, official day, would not be neces- 

16. A survey under competent direction — such as the Agri- 

cultural College of the State University — of the farm 
land in the Relief Home Tract, to ascertain how the 
land can be most profitably cultivated and to demon- 
strate the advisability — or otherwise — of extending this 
form of industry. 

THE HEALTH DEPARTMENT is a branch of the City 
Government charged with supplying certain services for which 
the public pays. 

The public is entitled to value for its money. To ascertain 
whether or not the Health Department is rendering this full 
measure it is necessary to measure service against cost. In no 
other way can the test of efficiency be applied. 

In comparison with other cities of the United States the per 
capita cost for health and sanitation in San Francisco is low. 

The average per capita cost in the first 18 cities of the Uni- 
ted States, ranging in population from 300,000 to 5,000,000, includ- 
ing San Francisco, was, according to the report published in 
1012 by the United States Census Bureau, $2. 

Omitting San Francisco the average was $2.03. 


San Francisco's per capita cost was $1.45 or 28.57 per cent 
lower than the average in seventeen cities. 


The City and County Hospital. 
Tuberculosis Hospital. 

3. Isolation Hospital. 

4. Relief Home for the Aged and Infirm. 

5. Emergency Hospital Service. 

All of these are operating concerns, exactly analogous to 
private institutions, except that the people pay for maintenance 
instead of the patients. 


1. Sanitary Inspection. 

2. Sanitary Disinfection. 

3. Food Inspection. 

4. Dairy Inspection. 

5. Milk Inspection. 

6. Market Inspection (Meat, etc.). 

7. Plumbing Inspection. 

8. Industrial Inspection. 

9. Tenement House Inspection. 
10. Medical Inspection of Schools. 

These services are paid for by the public whose wish — and 
right — it is always to get full value for money expended. 

The Quest for Facts. 

In the quest for facts upon which to base an estimate of the 
efficiency of the Health Department a survey was made of all 
the institutions maintained by the Board of Health, and of the 
working of the various field departments. To each division an 
effort was made to apply the test of efficiency by measuring ser- 
vice against cost. It was in this attempt that the inadequacy 
of some of the records maintained by the Health Department 
became apparent. 

No facts were sought which should not have been currently 
available for the purposes of control and direction. 

System of Accounting. 

It became evident early in the quest that the system of 
accounting at present in use is of little value except as a meas- 
ure of the monthly decline of the various apportionments of the 
annual appropriation. 

The present system: 

1. Does not show currently the cost of particular ser- 


2. Does not account for supplies beyond the record of 

their purchase. 


Work Well Organized. 

The field work of the department is well organized. The 
system of records — of work — is such as to give the executive 
officer and the Board of Health the information necessary to 
effective direction. 

Complaints from the public are given prompt attention. 
Written complaints are acknowledged and the complainant is 
advised of the action taken. 

A system of reinspection insures thorough work. 

By means of lectures and other instruction the field forces 
are kept in touch with advancements in sanitation. 

The work appears to be well done, but, inasmuch as work 
must be paid for, its cost is an element which must be consid- 
ered both by those in charge and by those that supply the 

Furthermore, the better the work the more essential it is to 
establish cost standards. 

It is in supplying information as to costs, currently and in 
easily available form, that the records fall short. 

The food inspectors, for instance, do part of the work credi- 
ted to milk inspection and the milk inspectors spend most of 
their time inspecting dairies. 

No records are kept showing the distribution of the time 
devoted to each particular division of work. 

Without this distribution it is impossible to apply to any 
of these divisions the cost test of efficiency. 

Records That Tell Nothing. 

The milk inspection division, from the period from July I, 
1913, to March 31, 1914, is charged with a total expense of 
$1340.57. Of this amount $1124.77 is for personal service; $63.80 
for supplies and $152 for buggy hire. 

The work credited to this division is the taking of 3202 
samples of milk. 

This would make it appear that the cost of sampling milk 
was at the rate of .418 cents a sample. 

As a matter of fact — there is no record of this, however — 
more than half the samples were taken by the Food Inspectors, 
none of whose remuneration is charged to this account, and 
practically all the charge for buggy hire was incurred in Dairy 

Furthermore, taking the sample is only part of the expense 
involved in the inspection of milk. There is no record of the 
cost of chemical and bacteriological examinations. 

Charging to Milk Inspection service devoted to Dairy and 
Food inspection makes the records of all three divisions as now 
maintained of no value in estimating the costs of these services. 
Nor can the cost of milk inspection be computed without a rec- 
ord of the time and material expended on this work in tin- 


The Remedy. 

Most of the information necessary for computing the cost 
of the different kinds of service is already reported. To make it 
available, however, for administrative purposes, the information 
must be distributed according to the particular service with 
which it deals. 

The inspectors in all branches of the field service turn in 
daily reports showing the work performed. The laboratory 
keeps a record of work done. In addition to the present infor- 
mation, now used solely to keep track of work, these daily 
reports should show: 

i. Time devoted to each kind of work. 

2. Amount of material used. 

3. The expense, such as transportation, incurred. 

From these reports the distribution could be made under as 
many heads as necessary for the guidance of the controlling 
authority and the information of the public. 

This would make possible the preparation of a daily report 
which would give the executive officer of the board the infor- 
mation which the manager of a private enterprise would con- 
sider a necessity. 

An Adequate Report. 

Not only has the department within itself the information 
necessary for proper cost accounting, it has in the division of 
disinfection a system of reporting which might serve as a 
model for all other field divisions. The disinfectors' daily 
report shows the amount of work done, the time spent on each 
job, the amount of material used and the space disinfected. 

Stores and Supplies. 

Another bar to the application of the cost measure was 
encountered in the failure of the present system to exercise 
control over stores and accountability for the use of supplies. 

There should be, at each institution, records to show cur- 

1. Goods received. 

2. Goods that should be on hand. 

3. The use made of goods issued. 

At the Relief Home, City and County Hospital and Tuber- 
culosis Hospital stores records have been installed but no admin- 
istrative use is made of them and there is no accounting con- 
trol over them. 

Present Control Inadequate. 

Under the present system the only control exercised over 
stores and supplies by the Board of Health, through the Health 
Officer, is the latter's O. K. on all requisitions and the limit 
imposed by the one-twelfth requirement. 


The Health Officer's approval is more or less perfunctory In 
the majority of cases as the requisitions submitted for his ap- 
proval give him no information, such as the amount of the par- 
ticular commodity on hand, by means of which he can judge 
the necessity for the purchase. 

The one-twelfth requirement does not, in practice, limit 
purchases to the necessities of the period in which they are 

Reasons for Control. 

Adequate control over stores and a strict accounting for 
supplies is necessary: 

i. To check waste. 

2. To prevent misappropriation. 

3. To compute costs of operation. 

An Illustration. 

The inadequacy of the present control was emphasized by 
the discovery, over a year ago, that supplies at the Tuberculosis 
Hospital were being stolen and sold by employes. 

In June, 1913, before the thefts were discovered and at a 
time when there were 149 patients in the hospital, this requisi- 
tion was approved by the Health Officer: 

1400 doz. eggs. 
500 pounds of fish. 
700 pounds of butter. 

The thefts were discovered, the thieves cleaned out and a 
new commissary appointed. In November, 1913, with 200 pa- 
tients to provide for the egg and butter and fish requisition for 
the month was: 

1500 doz. eggs. 
360 pounds of fish. 
500 pounds of butter. 

No standards had been established by means of which the 
superintendent of the hospital could estimate the food supplies 
actually needed for the number of patients to be cared for and 
there were no records at headquarters to guide the Health 
Officer in approving the June requisition. 

As a matter of fact the actual fare provided for the 200 
patients in November was better in every way than the 149 
patients received in June from a considerably greater expendi- 

No such standards have been established yet. 

The opportunity for misappropriating supplies still exists 
and will until a system of accounting for them has been in- 

What is true of the Tuberculosis Hospital is equally true of 
every other institution under the jurisdiction of the Health 


Supplies and Costs. 

Theoretically, supplies are bought for institutions under the 
Board of Health only in quantities sufficient for one month. 

In practice, it is the custom, at certain times, to purchase 
in much larger quantities. 

In May and June, 1912, there was bought for the Tubercu- 
losis Hospital linen to the value of $300. In May, 1913, mat- 
tresses, muslin and blankets, amounting to $381.90 were bought 
for the same institution. 

In each case the purchase was entered as an operating cost 
of the month in which the purchase was made, although, as a 
matter of fact, the supplies were not issued until months later. 

Similar purchases (in excess of the month's requirements) 
are made by all institutions whenever it appears that there is 
going to be a surplus over the estimated expenditures. 

The Reason. 

The reason for expending surplus in this way and entering 
such expenditure as a current operating charge is to be found 
in the method of financing municipal institutions on the basis 
of what they spend instead of on what they actually use. 

There is no objection to the purchase of staples in large 
quantities where this will effect a saving. Where it is done, 
however, merely to increase the expenditures of one year for 
the purpose of securing a large appropriation for the next fiscal 
year it is bad practice. 

Stores Accounts. 

Instead of treating all purchases as current operating ex- 
penses, all supplies should be charged to stores accounts and 
should appear as operating expense only when actually issued 
for use. ! 

The establishment of stores accounts, with a controlling 
account at the Central Office, would make it possible to dis- 
tribute the expense of supplies to the periods and functions in 
which they were used and would serve as an inventory of the 
unissued supplies, of which there is now no record. 

Segregation of Expenditures. 

In the method of segregating expenditures was found another 
barrier against the application of the cost measure. 

In the office of the Auditor of the Board of Health expendi- 
tures affecting the Central Office are segregated. Expenditures 
are segregated at some of the institutions. The segregations, 
however, are not uniform throughout the service and the dis- 
tribution in many cases is such as to render impossible, without 
re-analysis, a computation of operating costs. 

Supplies That Are Not Supplies. 

In one institution, under the heading "General and Kitchen 


Supplies," and as such to be considered as operating costs of 
the month in which they are entered, are included charges for: 

Paint and roofing material. 

Electric coffee mill and meat chopper. 

Repairs to water heater. 


The Remedy. 

The power to remedy this situation lies within the depart- 
ment. A system of segregation similar to that in operation in 
the Bellevue and Allied Hospitals of New York City could be 
installed under the supervision of the Auditor of the Board of 
Health. This would provide the uniformity that is now lacking 
and would insure a distribution of expense charges such that 
the records would yield, currently, information which now must 
be dug out by a laborious process of analysis. 

Cost Measure at Relief Home. 

The application of the cost measure to the Relief Home is 
impossible without a record of the amount and value of the 
inmate labor. 

In his annual report for the fiscal year ending June, 1913, 
the Superintendent said: 

"I would again repeat what I said last year as to the value 
of inmate labor. Although the saving to the city is great the 
benefit to the old people is far greater." 

He submits, however, no figures to show the value of this 

Without definite knowledge its value can only be presumed 
and the Board of Health is without data which would be in- 
valuable in consideration of plans for its extension. 

The fact that the Relief Home may be administered with 
economy and efficiency makes it all the more necessary that full 
and illuminating records be maintained in all departments so 
that standards may be established by which future administra- 
tions may be measured. 

Relief Home Activities. 

The Relief Home operates, largely with inmate labor: 
1. A farm. 

A dairy. 

A laundry. 

Tailor shop. 

Shoe repairing shop. 

Sewing room. 

Building and repair department. 

Pumping plant. 

Power plant. 

Mattress factory. 

Tin shop. 

Blacksmith shop. 

Wagon factory. 


The social value of utilizing inmate labor is fully recognized. 

Without a knowledge of its financial value there cannot be 
full and intelligent extension of its use. 

This financial value can be ascertained only through accounts 
which will report, in the case of each industry, the cost of its 
maintenance and operation and the value of the work produced. 

The information needed for these accounts could be drawn 
largely from records now maintained. 

Such accounts would: 

i. Establish standards by means of which the efficiency 
of the administration could be tested. 

2. Prevent the misuse of funds provided for inmate labor. 

3. Prevent misuse of the products of inmate labor. 

4. Point the way to a higher degree of self-support. 

Relief Home Farm. 

The Relief Home Farm should be an important factor in 
contributing to the support of the institution. Its value cannot 
be judged by the records now available. 

The suggestion is made that the Board of Health obtain 
the co-operation of the Agricultural College of the State Uni- 
versity in making a survey of the farm land at the Home 
(about seventy acres) for the purpose of establishing how this 
land should be used to the greatest permanent advantage in 
meeting the Home's needs. 

It is also suggested that co-operation be brought about 
between the Civil Service Commissioners and the Agricultural 
College in the matter of fixing the qualifications of the "farmer" 
instrusted with the supervision of the Relief Home Farm. 

Essentials for Cost Accounting. 

That a current knowledge of costs of operation is essential 
for intelligent administration will not be questioned. The Board 
of Health is now working without this knowledge. 

The essentials for proper cost accounting are: 

1. Time records. 

2. Work records. 

3. Stores records. 

4. Segregated expense accounts. 

Time and work records can be used also to establish records 
of individual efficiency. Such individual records are invaluable. 

1. To the employe, because they give him a standing 
based on fact instead of favor. 

2. To the service generally because they produce the 
spirit of wholesome competition, one employe with 
another and each with his own past record. 

It is only by a system of stores accounting that the charges 
for supplies dispensed can be distributed as costs of the various 
functions or projects into which they enter. Stores accounts 

also supply the only reliable information upon which appropria- 
tions can be based. 

With proper records of time, work and stores all the ex- 
penses incident to carrying on the work of any division or 
institution can be so distributed that the completed record will 
yield currently all the information needed for official information 
of things done or the wisdom of doing them. 

San Francisco enjoys the reputation of having an efficient 
Health Department. This is one of the best reasons why ade- 
quate records should be maintained. 

Licenses to Pay Inspection Costs. 

Commercial enterprises whose operations are subject to sur- 
veillance by the Health Department should contribute, in the 
form of fee or license, a sum sufficient annually to cover the 
cost of inspection. This would make possible an extension of 
the inspection service which, for lack of funds, is now limited. 

It is suggested that the Board have an analysis made show- 
ing the costs in each division of the inspection service of each 
particular kind of inspection. This information could be used 
as the basis for an ordinance, fixing such fees or licenses, to be 
submitted to the Board of Supervisors. 


Changes Requiring Charter Amendment. 

1. The salary of the Sheriff is out of proportion either 

to the duties and responsibilities of the office or the 
value of the service that he renders to the community, 
and should be reduced. 

2. If the Sheriff is legally justified in appropriating for his own 

use certain fees paid by the State for services performed 
by deputies in the pay of the City and County, the Charter 
should be amended to require the payment of these fees 
into the treasury for the benefit of the general fund. 

Changes Which Would not Require Charter Amendment. 

1. Discontinuance of road work by prisoners at the County 


Prisoners now so employed could be put to 
work in jail truck gardens and the services of 
six road guards and a number of horses could be 
dispensed with. 

2. Substitution of one motor vehicle for two vans and 

commissary wagon. 

3. Disposition of all but one or two of the horses now 

maintained at County Jail. 

4. Return to duty at the County Jail of commissary clerk, 

superintendent of jails and bookkeeper for all jails, 
or reduction of their salaries to the value of the 

•See organization chart of Sheriff's office, Chart IX. 

'AIL //* / 

Jail A/°% 


at crry /Mii 

&ELO*f 4.//VE. 

cocwry jrA/t- 

7a/l /V?3 


lope* v'J//. 

/ - /aoo 



/_ qoo 

Ott/cs o'f'iry 

£ - foe 

Jtt.4. TAi 


Act'g. OfSny 
/ - /2-oQ 


2. — 900 



Men- civil ^tri/ice* 
Civil <$€ri/TG* . 

7err*x>o-r<rry AffOTntXe. . 

O/^K^A/Y/^lA 7-/0/V C/IAA? TT- 


o***~/C£z. /tAf£> crcHs/y-ry zta/l- 


services they render and amendment of their titles to 
describe their actual duties. 

5. Establishment of stores accounts at the County Jail. 

This is necessary to prevent misuse of supplies and 
material and for protection of employes handling sup- 
plies and material. 

6. Segregation of expenditures at County Jail and in 

Sheriff's office so that standards of expense could be 
established and unit costs of subsistence and other 
functions computed currently. 

7. Maintenance of records to show expense of cultivating 

city land in vicinity of jail, the products therefrom, 
their market value and final disposition. 

This to insure the proper use of such products 
and to furnish information which would be of use 
in considering the extension of this form of 
prison industry. 

8. If a druggist is necessary at the County Jail, he should 

be there. If a visiting physician is what is needed 
the title of the position should be changed to describe 
the duties actually performed. 

The City and County pays $1200 a year for the 
services of a druggist at the County Jail. The 
position was created March 12, 1909, by the 
Supervisors. The ordinance — No. 690 (New Se- 
ries) — authorizes the appointment, by the Sheriff, 
of a licentiate pharmacist "to take charge of the 
dispensary at the County Jail." The dispensary 
at the County Jail was in charge of a prisoner 
when this survey was made and the position of 
"Druggist" held by a practicing physician who 
paid a daily visit to the jail. It was plainly the 
intention of the ordinance creating this position 
that the jail druggist should render full time 

9. Abolition of the position of druggist and an arrangement 

made with the Board of Health for maintenance of 
drug and medical service at the County Jail. The 
Board of Health now employs 29 physicians and 15 
internes between whom the medical necessities of the 
County Jail could be distributed in such a way that 
it would add little to their present duties. 
[O. Determination, by means of suit brought by the City 
Attorney, of the Sheriff's right to retain the money 
paid by the State for the services of deputy sheriffs 
engaged in escorting prisoners and insane patients 
to state institutions. 

It is believed that under the decision rendered 
in the case against the County Clerk, in which 
it was held that he had no right to retain fees 
received for the naturalization of aliens, the 
Sheriff is not entitled to this extra compensation. 
The Charter, Section 34 of Article XVI, spe- 
cifically limits the compensation of municipal 
officials and employes to the salaries provided in 
the Charter. 


Sheriff's Compensation. 

The salary of the Sheriff is out of all proportion either to 
the duties and responsibilities of the office or to the service 
that he renders to the community. 

In addition to a salary of $8,000 a year, paid by the City 
and County, the Sheriff receives fees from the State, which in 
the fiscal year ended June 30, 1914, amounted to $5,050. This 
additional compensation is paid by the State for the services 
of deputy sheriffs as custodians of prisoners en route to the 
state penitentiaries and patients sent to the state asylums for 
the insane. 

For the services of these deputies the State pays at the 
rate of $5 a day. In addition the State pays all transportation 
expenses and hotel and board bills. In the majority of cases the 
deputies who do this work are members of the Sheriff's permanent 
force, and as such are paid by the City and County for their full 
time service. 

Under the present arrangement, however, the money paid 
by the State goes to the Sheriff, personally, in direct violation 
of Section 34, Article XVI of the Charter, which reads: 

"The salaries provided in this Charter shall be in 
full compensation for all services rendered, and every 
officer shall pay all moneys, no matter from what source 
derived or received, into the Treasury of the City and 
County within twenty-four hours after receipt of the 

Sheriff Has No Police Duty. 

Although the salary paid to the Sheriff of the County of 
San Francisco is the highest paid to any Sheriff in the State, 
the office is of less public importance than in most counties 
for the reason that by virtue of the consolidation of City and 
County government, the Sheriff of San Francisco is relieved of 
all police duty. 

Under these circumstances it is suggested that consideration 
be given to the possibility of making the Chief of Police the cus- 
todian of prisoners and so limiting the Sheriff's duties. 

Comparison with Other Salaries. 

In view of the unimportance of the Sheriff's position in this 
county a comparison of his salary with some of the salaries 
paid by the United States government is interesting. 

The salary paid to the Sheriff of San Francisco is $500 a year 
more than the salary of a United States Senator; $2,000 more 
than the Comptroller of the United States Treasury is paid; 
$3,000 more than the pay of the rear admiral in charge of the 
Bureau of Navigation — practically the general manager of the 
United States Navy — and twice as much as the government 
pays either the Chief of the United States Secret Service or 
the Superintendent of United States Prisons. 

Reduction Would Increase Efficiency. 

If the duties of the Sheriff could be limited, as suggested above, 
the salary should be reduced. This, it is believed, would result 
in the more efficient administration of the office. 

The discipline in the Sheriff's office is good and the work 
appears to be performed in a satisfactory manner. A time book 
is maintained in which employees are required to record their 
arrivals and departures and employes on outside work are 
required to turn in a report of their activities showing location, 
time and volume of work done. 

Administration of County Jail. 

For the maintenance of this institution the Supervisors for 
a number of years have made an annual appropriation of $45,000. 
There is also set aside $2,500 a year for "Sheriff's Expense" 
and from this appropriation also part of the maintenance cost 
of the jail is drawn. 

The $45,000 is set aside under the head: "Subsistence of 
Prisoners." This title is misleading as more than 30 per cent 
of the appropriation is used for other than subsistence purposes. 

No Necessity for Two Appropriations. 

The need for two appropriations is not clear. Judging from 
the charges made to these accounts the selection of the fund 
to bear a particular expense is governed more by the discretion 
of the Sheriff than the nature of the expenditure. As a rule, 
non-contract purchases of supplies and service — such as horse- 
shoeing — are charged to the "Sheriff's Expense Account." When 
this account, however, has been exhausted, maintenance expendi- 
tures, non-contract or otherwise, are charged to the so-called 
"Subsistence" account. 

Sheriff's Patronage. 

The dispensation of the $2,500 appropriation is referred to, 
in the Sheriff's office, as "Sheriff's patronage." It is not suggested 
that the Sheriff pays from this fund for any service or article more 
than the market value. The element of "friendship" involved, 
however, is not conducive to good business practice and is cal- 
culated to hinder the elimination of unnecessary expense. 

Horses not Necessary. 

There are 16 horses at the County Jail. For the six months 
ended June 30, 1914, the cost for feed amounted to $2,257.17. Shoe- 
ing for the same period amounted to $31775- There arc two 
stables and in charge of each is a guard at a salary of $600 a 
year. This, without allowing for the value of the labor of the 
prisoners who feed and care for the horses and exclusive of 
other stable expense makes the annual cost more than $6,300. 

By doing away with all but one or two of the horses the use 
of forage in large quantities would be eliminated. The horses are 
no longer necessary. 


Substitution of Motor Vehicles. 

The new County Jail (in the rear of the Hall of Justice) 
will be finished shortly and ready for the accommodation of 
prisoners awaiting trial on felony charges. The opening of 
the jail will reduce materially the number of prisoners to be 
hauled back and forth daily in the van. 

One motor van could be substituted for the five horses (and 
three drivers) now used on the prison van, insane patients van 
and the commissary wagon. 

A motor does not get tired. Three trips or ten trips a day 
could be made between jail and city if necessary. 

An automobile runabout could take the place of the Super- 
intendent's buggy, if it is necessary that he should have some- 
thing of the kind. 

Six horses are used by the road gang. For several years past 
the Finance Committee of the Supervisors has recognized the 
fact that the work of the road gang was no longer necessary by 
recommending the abolition of the six road guard positions 
(annual salary $900 each), but the Board has refused to acquiesce. 

There is, however, every reason why this pretended road 
work, which costs the city nearly $10,000 a year, should be 

First. There are no records of the work done that might 
show its possible value. 

Second — Restrictions imposed by anti-prison labor influences 
limit the work to "unaccepted" streets. 

Third — Only a few prisoners are worked in these gangs. 

Fourth — It is frankly admitted that much of the time and 
labor of the road gangs is devoted to grading or otherwise 
improving private property. The excuse is made that this work 
is done for "poor people," but there are no records available 
and it is obvious that in any case the work of the road gangs 
is merely part of the Sheriff's patronage. 

Inside the reservation there is plenty of work for all of the 
inmates. There are extensive prison gardens, which are only 
partly cultivated, and in addition thereto, the city owns con- 
siderable land adjoining the reservation which could be put to 
profitable use in the same way. With the proper use of the 
land, possibly under the direction of the Agricultural Depart- 
ment of the State University, it is estimated that vegetables 
could be grown to supply all of the city institutions. 

What Could Be Saved. 

The elimination of the road gang would do away with the 
need for six more horses. The substitution of motor vehicles 
would take the place of the others. The stables would be no 
longer necessary and the two guards now acting as stablemen 
would be released for other duty. The forage and shoeing bills, 
amounting to more than $5,000 a year, would be eliminated. 


Records at County Jail. 

At the County Jail there are no records of stores or equip- 
ment on hand, or of the unit cost of feeding prisoners. 

Records are kept at the Sheriff's office in the City Hall 
in which expenditures are segregated but there is no central 
control over supplies after their purchase. This is necessary 
both for the purpose of computing costs and to prevent the 
misuse of supplies. 

Administration of Jail. 

For reasons entirely unofficial the superintendent of the 
County Jail and the commissary were transferred from the 
jail to the Sheriff's office in the City Hall. The duties of the 
superintendent were turned over to an office deputy, a temporary- 
appointee. The superintendent has a desk at the Sheriff's office 
but no duties, and, as far as could be learned, does no work 
beyond "helping out" occasionally in a rush. 

The commissary department at the jail is in the hands of 
a jailer, also a temporary appointee. The official commissary, 
at the City Hall, attends to the purchasing and keeps the 
records formerly kept at the jail, from memoranda furnished 
by the acting commissary. He does the purchasing and keeps 
the records, but, under the present arrangement, is barred 
from inspecting deliveries and exercises no supervision over 
the issuance of supplies. 

Jail Bookkeeper Also at City Hall. 

The "bookkeeper for all jails" is also located at the City 
Hall. When the Sheriff removed the superintendent, the book- 
keeper, a non-civil service employe, refused to remain and take 
orders from the office deputy who was appointed superintendent. 
Although the Sheriff had the power to dismiss the bookkeeper 
he did not exercise it. Instead, an office deputy, inexperienced 
in beekkeeping, was detailed as bookkeeper for all jails and the 
employe appointed to that position and drawing pay for that 
work — $1,500 a year — is allowed to put in his time "helping 
out" in the Sheriff's office at the City Hall. 


No attempt has been made to estimate in dollars and cents the 
savings that could be effected in San Francisco through the adop- 
tion of improved methods of transacting public business. It has 
been deemed sufficient to point out and illustrate concretely some 
of the avoidable causes of present waste. 

The problem is not hopeless. In the past ten years the munici- 
pal research movement, begun in New York and later extended to 
almost every large city in the country with the exception of San 
Francisco, has gone a long way toward reaching a solution. In 
the experience of these cities, certain definite principles, practices 
and methods have come to be accepted as standards and are now 
readily available. Immediate and positive advantages are known to 
follow upon their adoption. 

San Francisco must make a beginning, now or later. On the 
basis of this report, the program of municipal betterment should 
consist of the following steps: 

i. A fuller development of revenue sources. 

2. Installation of a modern accounting system. 

3. Adoption of exact budget methods. 

4. Creation of a central purchasing agency. 

5. Standardization of salaries and work. 

6. Preparation of organization charts for each department. 

7. Publication of more informing reports. 

It must not be forgotten that the alternative is a steadily in- 
creasing tax rate, greater waste and a harder problem in the end. 


TION is a non-partisan, non-political organization 
devoted to promoting a wider public interest in the 
important subject of taxation. 

The objects of the Association are 

"to correct existing evils and inequalities in taxa- 
tion; promote economy in public expenditures, both 
State and local, and to formulate and announce the 
most progressive economic thought and administra- 
tive experience available for the correct guidance of 
public opinion, legislative and administrative action 
on all questions pertaining to State and local tax- 


President John S. Drum 

First Vice-President J. F. Sartori 

Second Vice-President M. L. Rcqua 

Secretary Dudley Cates 


John S. Drum 
Allen G. Wright 
Allen Chickering 

B. F. Schlesinger 
George T Klink 
Marshal Hale 

C. O. G. Miller 
San Francisco 

J. F. Sartori 
Geo. I. Cochran 
W. E. McVay 
W. W. Mines 
H. W. O'Melveny 
Los Angeles 

M. L. Requa 

San Francisco